By Tom Head for The South African
South Africa could be set for another round of drama from Eskom, as the ailing power utility has reportedly failed to receive R7 billion in loan payments initially set to come from the Chinese Development Bank (CDB).
That’s according to City Press, who have reported that the creditors do not trust their promises over proposed maintenance work. It would be the second time in just over two weeks that one of Eskom’s promised loans failed to materialise after the Brics New Development Bank also did not part with their billions.
Why haven’t Eskom received the loan?
On Easter Friday, Finance Minister Tito Mboweni was forced to grant the power giants an emergency bailout in order to meet salary demands and diesel costs. It’s reported that the CDB has taken note of their actions, and fear that this particular instalment of their cash will be used to plug holes, rather than go towards maintenance.
The loan in question will come to R33 billion in total, and it has been earmarked for the development of the Medupi and Kusile power plants. The new builds are yet to get up to full speed, and they’re struggling to produce the amount of electricity needed to keep South Africa illuminated as more “old units” come to the end of their lifespans.
Load shedding fears resurface
Eskom is very much living hand-to-mouth at the moment. In fact, some of their biggest critics believe this will be the last week where the lights stay on: Natasha Mazzone of the DA has accused the firm of diverting funds from long-term projects in order to keep voters happy before the general election this Wednesday.
Public Enterprises Minister Pravin Gordhan has also refused to rule out the return of load shedding this winter, despite unveiling plans to nip it in the bud at the beginning of April. We’ve already seen how one defaulted payment can spark a financial crisis, so a second one within two weeks is a terrible omen for the company… and its consumers.