South African Power Utility Gets $1.3 Billion of Planned Support

(Bloomberg) -- South African power utility Eskom Holdings SOC Ltd. has received 17.7 billion rand ($1.3 billion) of planned financial support from the country’s National Treasury, according to Public Enterprises Minister Pravin Gordhan.

The transfer, which is part of a 23 billion rand of support pledged by the government for its current fiscal year, was approved by Finance Minister Tito Mboweni on April 2, Gordhan said in a text message.

Eskom is saddled with 419 billion rand of debt and isn’t selling enough power to cover its interest payments and operating costs, a legacy of years of mismanagement and cost overruns on new plants. The government said in February that it will support the state-owned utility with a 69 billion-rand cash injection over the next three years.

Johannesburg-based Eskom needed the funds to be transferred as quickly as possible to ensure its financial stability, Public Enterprises spokesman Adrian Lackay said by phone from the city.

To contact the reporter on this story: Paul Vecchiatto in Cape Town at pvecchiatto@bloomberg.net

To contact the editors responsible for this story: Alastair Reed at areed12@bloomberg.net, Andre Janse van Vuuren

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