Narissa Subramoney
Copy rewriter
2 minute read
15 Dec 2021
5:12 pm

No load shedding expected this Christmas, says Eskom CEO

Narissa Subramoney

No load shedding predicted for festive season. Electricity demand drops after 16 December when most industries shut down for the year.

Eskom CEO André de Ruyter at the MegaWatt Park in Sunninghill, Sandton. (Picture: Gallo Image/Freddy Mavunda © Financial Mail)

South Africa is likely to have a load shedding-free Christmas this year. As it stands, there is an excess in generation capacity, which is unusual for the national grid.

Eskom CEO Andre De Ruyter says demands for power generally drops after 16 December when builders go on holiday.

But he reminded South Africans the grid is unpredictable and can trip or break down at any point.

“But as it stands, the outlook for the festive season is positive. Eskom managed to put two units on coal reserves which is not a position the power utility is normally in,” said De Ruyter.

Eskom’s financial status is improving

The power giant has reported a R9.2 billion net profit after tax. The parastatal has also been able to reduce its net interest-bearing debt to R360.3 billion, 14% down from September 2020 (R420.6 billion).

But despite the healthier balance sheet, Eskom has forecasted net loss after tax of R9.1 billion for March 2022, compared to a loss of R18.9 billion in March 2021.

Gross debt and borrowings stand at R392.1 billion, which is an improvement from R463.7 billion in September last year.

De Ruyter said one of Eskom’s main priorities is to reduce debt owed by municipalities, which is now over R43 billion.

“To put it into perspective, municipal debt exceeds 10% of Eskom debt,” he said.

“We are in discussions with National Treasury. It’s unsustainable for this trend to continue.”

“Eskom cannot remain a bank to municipalities, R5 billion will make a difference on our balance sheet,” added Eskom CFO Calib Cassim.

Soweto’s debt dropped to R6.9 billion, but this is mainly due to writing off of prescribed debt. Only two large customers owe more than R100 million, with a combined debt of R785 million.

Eskom spent R2 billion on diesel in September this year. Preliminary assessments show that R900 million was written off for the Medupi unit 4 explosion and R86 million was written off for the Kendal unit one transformer.

Meanwhile, Public Enterprises Minister Pravin Gordhan has announced that 36,000 hectares of Eskom-owned land in Mpumalanga will be leased out to private power producers.

Portions of this land will be made available via competitive lease agreements. The maximum amount of electricity generation capacity per project will be capped at 100MW.

Eskom will provide connections up to the nearest network connection point. “This project is in line with the President’s directive for South Africa to take bold steps for it to emerge from the electricity constraints as soon as possible,” said Gordhan.