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.

©2019 Bloomberg L.P.