How Eskom, South Africa’s power utility, lost $171 million

JOHANNESBURG (Reuters) – South Africa’s struggling state-run power firm Eskom reported a 2.3 billion rand ($171 million) loss on Monday, underlining the enormity of the task facing President Cyril Ramaphosa, who has pledged to turn the company around.

Eskom, Africa’s largest public utility, was embroiled in corruption scandals under former president Jacob Zuma and narrowly avoided a liquidity crunch early this year after banks halted lending. Zuma has denied any wrongdoing.

It supplies more than 90 percent of South Africa’s electricity, and ratings agencies regularly cite its 220 billion rand of government-guaranteed debt as a threat to the country’s sovereign credit ratings.

Eskom pegged the loss for 2017/18 financial year ending March on increases in financing costs and depreciation compared with a profit of 888 million rand in the previous reporting period.

“Eskom is undoubtedly facing one of the most difficult times in its history,” Eskom chairman Jabu Mabuza said.

The utility’s executives told a news conference it had 22.7 billion rand liquidity by the end of the financial year.

Eskom reported about 20 billion rand of irregular expenditure incurred since 2012, as the firm combs its financials for evidence of wrongdoing.

Reporting by Alex Winning; Editing by James Macharia

Partner Content

Standard Chartered and Airtel Africa form a partnership to drive financial inclusion across Africa

Dubai, United Arab Emirates / London, United Kingdom – 13 August 2020: Standard Chartered Bank and Airtel Africa have today announced a...

THE FUTURE JUST ARRIVED: THE ROLE OF BANKS IN A POST-COVID WORLD

THE COVID-19 GLOBAL pandemic has brought forward the future. It has brought about humanity’s biggest challenge in a century, to choose between...

Mauritius-Africa, a partnership for shared prosperity

By: Mathieu Mandeng In the current complex and challenging circumstances that are testing the...

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

- Advertisement -