Eskom’s Debt Drops Below $28 Billion Amid Funding Talks

(Bloomberg) -- South African power utility Eskom Holdings SOC Ltd. has reduced its debt to less than 400 billion rand ($28 billion) as discussions ensue to secure funding for a transition to renewable energy, said Public Enterprises Minister Pravin Gordhan.

The state-owned company announced in May it had reduced debt by a fifth to about 401 billion rand.

“Eskom has done further work to reduce the debt to below 400 billion rand,” Gordhan said Wednesday by phone from the capital, Pretoria. “The exact number is still a work in progress,” he said, without providing more details.

Eskom hasn't been producing enough electricity to meet the nation's needs, resulting in intermittent power shortages. The utility isn't generating enough cash to cover its operating expenses and interest bill, leaving it dependent on government bailouts to survive.

READ: South Africa's Biggest Polluter Aims for 2050 Net Zero Emissions

Chief Executive Officer Andre de Ruyter has taken measures to cut costs and find green funding to reduce the company's reliance on government support. That could be dependent on it retiring coal-fired power plants ahead of schedule.

The utility estimates $10 billion will be needed to shut most of the coal stations by 2050. Eskom has plans to repurpose the sites to be powered by cleaner energy sources.

“We have had quite a few discussions with quite a few interested parties, including many development finance institutions, who are prepared to provide concessional funding to Eskom” for a transition to clean energy, Gordhan said. “The ultimate solution will be to integrate all these solutions to enable a just energy transition.”

READ: Eskom Needs $10 Billion to Repurpose Most Coal Plants by 2050