President Cyril Ramaphosa has pledged to ensure the speed up of the release of the R230 billion of support for the ailing power utility Eskom, which he says is too vital to the economy to be allowed to fail.
In his first State of the Nation Address (SONA) as head of the sixth administration, Ramaphosa said Eskom’s financial position remained a matter of grave concern.
He says Parliament will urgently table a Special Appropriations Bill to allocate a ‘significant portion’ of the fiscal support that Eskom requires.
Ramaphosa, however, did not say what proportion of the fiscal support would be allocated. He says Eskom only has sufficient cash to meet its obligations until the end of October 2019.
“The utility’s financial position remains a matter of great concern though. For Eskom to default on its loans, will cause a cross-default on its remaining debt and would have a huge impact on the already constrained fiscus. We will therefore have to address this matter, by tabling a Special Appropriations Bill on an urgent basis, to allocate a significant portion of the R230 billion fiscal support that Eskom will require over the next ten years,” says Ramaphosa.