NEWS & ANALYSIS

Eskom to recover R69bn over three years

NERSA agreed that deduction of equity injection was not correct in terms of its MYPD methodology

Eskom welcomes the High Court decision that allows for phased recovery of the R69bn equity injections

28 July 2020

The Judgement on the Eskom Board review of the National Energy Regulator of South Africa’s (NERSA’s) decision on the Multi-Year Price Determination (MYPD) 4 was delivered today.  The Judgement requires Eskom to recover the R69bn, in a phased manner over a three year period. Prior to the Court hearing, NERSA was in agreement that the deduction of the equity injection was not correct in terms of its MYPD methodology. The Judge was required only to make a decision on the recovery of the equity.  

Eskom welcomes this decision which allows for Eskom to migrate towards a situation where it could become more self-sufficient and be in a position to recover efficient costs and reduce its dependence for further equity support from the Government.

CalibCassim, Eskom’s Chief Financial Officer says, “The Judgement that has been delivered is very encouraging. It aids in instilling confidence in the regulatory regime within the country, by ensuring that the NERSA methodology is adhered to.  This Judgement will assist Eskom in paving the way forward towards financial sustainability.”

It is understood that certain vulnerable sectors of the economy – poor residential customers and certain industrial sectors will require special consideration. Various measures are already in place to protect the poor. In addition, Eskom has been participating, under the leadership of the Department of Mineral Resources and Energy (DMRE), in proposals where certain vulnerable economic sectors would be considered for targeted support.

Eskom will work with NERSA in implementing the outcome of the Court decision.   

Issued by Eskom Media Desk, 28 July 2020