The power utility Eskom has released its annual report, and it doesn’t look good as they suffered a great loss resulting from the COVID-19 pandemic. According to Eskom’s CEO, Andre de Ruyter, there is a possibility that electricity tariffs will have to be increased as the utility looks to stabilise its enormous debt.
The report indicated that Eskom’s gross debt currently stands at R401.8 billion as the debt servicing costs of R31.5 billion contributed to the net loss. The power utility also took a massive knock by the COVID-19 pandemic as sales volumes went down 6.7%. Revenue growth to R204.3 billion was helped by an 8.76% tariff increase, EWN reports.
De Ruyter said that municipal debt also continues to cripple the power utility as it increased by 26% as outstanding municipal debt rose 26%. Ruyter also reiterated that Eskom is pursuing active partnership agreements with some of the municipalities to arrest the spiral in outstanding debt, ECR reported.
“Cost savings alone is not a solution. Eskom’s capital position must be resolved. Cost-reflective tariffs and resolving the municipal arrear debt are required to achieve the successful implementation of Eskom’s turnaround and to ensure long-term financial sustainability.”
