President Cyril Ramaphosa signed an amendment to the Eskom Debt Relief Act on April 8, aiming to address the power utility’s financial challenges.

The Eskom Debt Relief Amendment Act 5 of 2024 introduces several provisions to hold Eskom accountable for its R254 billion bailout and R330 billion of government-guaranteed debt. Under the updated law, the debt relief programme transitions into an interest-bearing loan, obliging Eskom to repay both the principal amount and accrued interest, with the interest rate set by the finance minister.

This amendment also empowers the Minister of Finance to reduce the allocated funds for Eskom should the utility fail to comply with the conditions outlined in the Debt Relief Act.

The Financial and Fiscal Commission (FFC) expressed apprehension about Eskom’s ability to meet its debt obligations. “Without significant structural reforms that address the root causes of its financial and operational challenges, it is unlikely that the entity will be able to serve these debt obligations,” the FFC said.

Eskom recorded a R24 billion loss in the 2023 financial year. To alleviate financial strain and facilitate investment in transmission and distribution infrastructure, Finance Minister Enoch Godongwana announced a R254 billion bailout during the 2023 budget, complemented by stringent conditions to ensure proper fund utilisation.