The minister of Public Enterprises, Pravin Gordhan, has informed the current board at struggling power utility Eskom that the government has finalised a review that will see it be reconstituted and restructured.
Intermittent supply cuts over the past 14 years have drained business confidence, sapped economic growth, and limited private investment in South Africa, noted Bloomberg.
The term of the board ended in 2021. Eskom, which can have a maximum of 13 non-executive directors, has only six. Seven have resigned, with the first resignation in 2018, and have not been replaced, according to News24.
“The minister informed the board that a review has been finalised and that the board will soon be reconstituted and restructured. The board members will be informed of the outcome of the process,” the department said in a statement on Tuesday (27 September).
“The minister has been in constant engagements with the board on various matters pertaining to the current generation challenges and other energy-related matters such as procurement, recruitment of former and experienced Eskom employees, and combating fraud and corruption,” it said.
It said that the board members will be informed of the outcome of the process. “Minister Gordhan thanked the current board for their service during the most challenging period of the entity. The government will soon deliberate on the reconstitution of a new and restructured Eskom board, and an announcement will be made in due course.”
Bloomberg meanwhile, reported that Germany and France are in talks with South Africa’s National Treasury about an estimated 600 million euros ($578 million) to help it transition away from the use of coal.
The loans may form the first part of $8.5 billion in financing offered to the country during last November’s global climate summit, it noted.
But with just over two months to go until COP27, the next iteration of the climate summit, it’s uncertain if there will be a clear statement on progress by South Africa and the funding partners – Germany, France, the UK, the US and the European Union.
While the UK has offered debt guarantees, it is not clear what proportion of the funds will come in the form of concessional loans or grants, and South Africa is yet to produce a plan spelling out how it will spend the money, said Bloomberg.
Separate to the climate finance talks, Eskom is in negotiations with the World Bank over $476 million in funding to help it close and re-purpose its Komati coal-fired plant, Andre de Ruyter, Eskom’s chief executive officer, said earlier this month.
Eskom said Tuesday that it may need to spend as much as R2.4 billion a month on diesel to keep turbines running.
The “worst-case scenario” to run units that burn diesel, originally designed only for peak demand periods, would result in a fuel bill of almost R29 billion a year, the state-owned utility said in a presentation to lawmakers.
The potentially higher costs add to the company’s woes as it struggles to meet South Africa’s electricity demand and is implementing controlled blackouts. It’s already R413 billion in debt and needs funding to fix an unreliable fleet of ageing coal-fired stations.
Read: The dysfunctional company that’s wrecking South Africa’s economy
