The South African Government has allocated an extra 59 billion rand ($4.24 billion) to struggling state-owned power utility, Eskom, over the next two years so it can service its debt, a special appropriation bill seen by Reuters on Monday showed.
The latest allocation, sourced from the government’s National Revenue Fund, provides 26 billion rand for the 2019/20 financial year and 33 billion for 2020/21.
“For the purpose of promoting transparency and the effective management of the amount … the Minister of Finance, in writing, may impose conditions to be met by Eskom before any part of the amount is transferred,” the bill read.
Finance Minister Tito Mboweni is expected to discuss the bill in parliament on Tuesday.
Eskom, which supplies more than 90 per cent of the country’s electricity, but was forced to implement power cuts this year, has failed to generate sufficient profit to meet its debt servicing costs.
The firm requires state cash injections to stay afloat.
In April, Mboweni authorised more than 17 billion rand for Eskom following a delay in the utility accessing funding from the China Development Bank.
Beyond the cash injections, South Africa is also weighing other support options for Eskom including swapping the firm’s debt for government bonds or ring-fencing it in a special account, a senior treasury official said earlier this month.