Eskom’s massive debt will hobble South Africa’s national electricity transmission company, sources tell Bloomberg.
South Africa’s plan to create a power transmission company that will attract the investment needed to strengthen the national grid has been hobbled by its restrictive debt arrangements with parent Eskom Holdings SOC Ltd., two people familiar with the situation said.
Eskom’s board will also approve an annual borrowing plan for the transmission company that will take the form of inter-company loans, the utility said in its presentation.The plan protects Eskom’s creditors by ensuring that NTCSA can’t ignore its obligations to the utility while paying its own debts.
It didn’t answer questions as to whether the arrangement was temporary or whether it would inhibit partnerships with private developers. Eskom has previously estimated that 180 billion rand needs to be invested in transmission and distribution networks to take advantage of the country’s renewable energy potential.
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