South Africa’s distressed utility that supplies 95 percent of its power will receive the biggest bailout in the nation’s history after the government stepped in to prevent its collapse.
Eskom Holdings SOC Ltd. will get a 69 billion-rand ($4.9 billion) cash injection over the next three years to help service its debt and free up cash for operations, Finance Minister Tito Mboweni said in his budget speech Wednesday to lawmakers in Cape Town. Part of the utility’s transmission business will also be sold to private investors and it will have to drastically reduce costs.
“Pouring money directly into Eskom in its current form is like pouring water into a sieve,” Mboweni said. “We are setting aside 23 billion rand a year to financially support Eskom during its reconfiguration.’’
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