NEWS & ANALYSIS

Foreign govts owe Eskom R632m – Natasha Mazzone

DA MP says of this R322m is owed by ZESA Zimbabwe, R221m by Mozambique

Foreign governments owe Eskom more than half a billion in outstanding payments

7 November 2019

In a reply to a Democratic Alliance (DA) Parliamentary question, the Minister of Public Enterprises, Pravin Gordhan, revealed that Eskom is owed R632 million in outstanding payments by foreign state-owned power utilities. A breakdown of the debts can be seen below:

Client

Outstanding Balance

Reasons

1

ZESA Zimbabwe

R322 million

Zimbabwe has economic challenges due to political challenges which have led to it being unable to honour its debt obligations. Eskom and ZESA currently have a payment plan agreement for the settlement of the debt and ZESA is paying off the debt as per the agreement.

2

Electricidade de Mocambique (EDM)

R221 million

Eskom supplies EDM with standby power. The utility has financial constraints due to their generation mix which includes IPP’s which are contracted on a take-or-pay basis.

3

ZESCO Zambia

R89 million

ZESCO owes Eskom due to power supplied during the previous drought period. The country has economic challenges which have led to it being unable to honour its debt obligations.  Eskom owes ZESCO for energy imbalance which arises out of managing the regional system. Eskom and ZESCO are currently concluding a payment plan agreement for the settlement of the debt.

While the Minister might be of the view that this R632 million will have a minimal impact on Eskom’s cash flow, the reality is that every cent counts when the power utility has a mountain of debt in the area of more than R420 billion. Half a billion Rand is an astonishing amount of money and could, in the long term, go a long way in stabilising the financial woes at Eskom.

As such, the DA has written to Minister Gordhan to request that he makes public the payment plans that Eskom has with these foreign governments which owe the utility millions in unpaid debt. The public needs surety that Eskom and indeed National Government is truly doing the necessary work to ensure that these outstanding debts are being collected.

In addition to this half a billion Rand owed by foreign governments, the power utility is also owed close to R20 billion in outstanding debt from municipalities across the country. Clearly Eskom is incapable of collecting debts both at home and abroad. This begs the question, does Eskom actually have plans in place to collect debts owed to it? If not, the utility will never be able to stabilise its cash flow, and the taxpayer will continue to pay for bailout after bailout.

The Minister has cited economic and political challenges as well as financial constraints as reasons for the non-payment . However, at the end of the day it is inconceivable that Eskom is willing to hold South Africans to ransom with the burden of rolling blackouts while it is supplying electricity to foreign governments who are not even paying for it.

With the threat of rolling blackouts ever present, Eskom should first meet its obligations here at home before it can ever think of overextending itself through power supplies to other countries.

It is also telling that the foreign governments which are failing to settle their Eskom debts, are governments with close ties to the ANC. The DA warns the governing party against allowing its mindless pursuit of regional solidarity to push Eskom further to the brink of collapse.

Issued by Natasha Mazzone, Chief Whip of the Official Opposition, 7 November 2019