Eskom's debt and loans amount to more than R396 billion, which jumped from R35 billion in the previous financial year, accounting for an increase of 27% this year.
After looking at the financial results released by Eskom, Energy analyst Tshepo Kgadima believes that this is Eskom's worst period and that 2023 will be an even more challenging year with regard to load shedding.
In the previous financial year (2021), there were a total of 65 days of rolling blackouts, while this year there have been over 140 days. The number of load-shedding days is set to increase in 2023.
According to Eskom's own admission, their plants are not available and it is believed that they do not have 20 000 megawatts of base load power at any point in time.
The demand for electricity is continuing to decrease and tariffs are exorbitantly high. The tariffs at the moment cost around R1.82c a kilowatt hour. Eskom has stated that they want a cost-reflective tariff which will result in an increase of 32%.
Once the financial year ends in March 2023, Deloitte (the new auditors of Eskom) will apply international financial reporting.
When these standards are applied, they will have to put in place an impairment charge which will right off at least R35.4 billion of the municipal debt and it will also write off 20 000 megawatts.
Eskom's debt is reflective of its continued reliance on intermediaries, such as supermarkets and banks. These intermediaries receive about R14 billion a year from Eskom to sell electricity.
Kgadima believes that if Eskom cuts out the middlemen it could save them billions and that Eskom should be the only seller of electricity.
According to Eskom, over 200 000 gigawatts of hours are lost due to theft and other measures. Due to the lack of improvement, increased debt and ineffective measures put in place by the government, there is a concern that Eskom will have to declare bankruptcy in the near future.
Eskom has to pay an interest rate of 10.2%, which is covered by the money borrowed by the government. It is estimated that the power utility will need to borrow R41 billion in 2023.
These factors mentioned above will result in lesser demand for electricity and will continue to add to the problems of Eskom .
Eskom has gone on to say that they are not responsible for building power plants, instead, they are responsible for maintaining them. This has led to the argument that the government is responsible for building power plants.
A counterargument offered by Kgadima is supported by the Eskom Convention Act of 2001, which states that the sole duty of Eskom is to generate, transmit and distribute electricity.
Kgadima believes it is the duty of management to make the proper decision in order to improve Eskom and South Africa's current power outage situation going forward and to ensure that they get good value for the R14 million that they spent the last financial year.
