Eskom is one step closer to having to pay interest on the debt relief funds it receives from the national treasury.
National Treasury's plan to make Eskom pay interest on the debt relief funds it receives passed a new test on Tuesday as the National Council of States voted in favor of the Eskom Debt Relief Amendment Bill.
The proposed amendment would allow Finance Minister Enoch Godongwana to charge interest on the billions of dollars in debt relief funds currently scheduled to be provided to power companies.
Despite opposition from the DA and EFF, the amendment passed with 25 votes in favor and 15 against.
Eskom received R44 billion from the National Treasury as part of the R78 billion allocated to utilities in 2023/24.
R78 billion and R66 billion were allocated for utilities over the next two years, but this was reduced by R2 billion for both periods due to Eskom's failure to dispose of Eskom Finance Company, which was one of the conditions of the loan. Ta.
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Currently, the debt relief fund is interest-free, but an amendment to introduce interest on the fund is now before the president, who will decide whether to sign it.
The 2024 Budget explains the rationale for the amendment as follows:
The interest rate is market-linked and designed to reflect the cost of the arrangement without negatively impacting Eskom's cash flows.
DA chief Dennis Ryder explained that his party's opposition to the amendment was based on the inflationary impact that electricity tariff increases, introduced to boost Eskom's income, were having on the country.
EFF's Mbali Dlamini said Eskom needed the money for other purposes such as factory maintenance.