R174 billion to bolster Eskom

Finance Minister Pravin Gordhan on Thursday announced government is extending its loan guarantee to Eskom by R174 billion.

This brings the total guarantee to R350 billion.

Gordhan was briefing MPs in Parliament. He took to the floor shortly after the Finance Committees were given a brief overview of the medium-term budget.

He said Public Enterprises Minister Barbara Hogan and Treasury agreed on supporting Eskom with its build programme.

Gordhan added that the multi-billion rand guarantee should offer enough assurance on the country’s energy security.

“This will enable Eskom now to continue with its entire build programme through to 2017,” he said.

Gordhan said the move should cast aside any doubts over whether government is standing by the utility.

The extra money will be used to fund the Kusile Power Station.

Gordhan was eager to allay fears that the construction of the 4,800 Megawatt power station in Mpumalanga would be scrapped because of financial constraints.

“Any doubts about Kusile and so on are all removed. They have the guarantee of government to do the borrowing they need to do, particularly when money is cheap now.”

The future of the other 4,800 MW power station Medupi, in Lephalale, is already secure thanks to a World Bank loan.

[Article from Eyewitness News. Chantall Presence.]