The South Africa government has revealed plans to save the state-owned power utility company, Eskom. The decision came in the face of the R450 billion debt owed by the company.
Founded in 1923, the state-owned company is saddled with the responsibility to provide electric supply for South Africa. However, the company did not deliver to expectations as it got trapped in excessive debt, lack of funds, lack of equipment, etc.
This debt burden was flagged as one of the key challenges facing South Africa’s economy and has prompted aid from the government. This includes an R69 billion bailout in February and an additional R59bn.
See Also: WiSolar to Launch decentralized Solar Electricity Solution in Africa
The South African government through the Minister of Public Enterprise, Pravin Gordhan has revealed a sustainable solution to the plight of Eskom. In a paper unveiled by Gordhan, the SA govt will:
- Separate Eskom’s services into various subsidiaries. This will majorly affect the transmission arm of Eskom. The new subsidiary will have an interim board to be separately managed.
- Restructure Eskom’s mode of operation. This will be done by flattening the company’s structure and allowing private individuals to contribute to electricity generation in the country.
Gordhan also noted that Eskom will not be privatized, rather it will get a new interim board as well as a new CEO next week.
