23 Apr Government bailout saves Eskom

Public enterprise minister Pravin Gordhan has stated that Eskom is not on the brink of financial collapse. Speaking to Talk Radio 702, Gordhan stated that government has the utility's monetary problems well under control. The comments come after reports last week revealed that the state was forced to pay R5bn in emergency funds to Eskom so that it could meet its obligations.

Treasury had in February promised the utility a R23bn a year bailout with the first tranche of that being made available between August and October but according to a finance ministry report to parliament, by the end of March, Eskom was experiencing difficulties raising funding and it's this that prompted Finance Minister Tito Mboweni to release funds earlier than anticipated.

The parliamentary report also suggested that Eskom could need another government cash injection before the end of the month.

Director General of National Treasury Dondo Mogajane joined Business Day TV to discuss why government had to make the payment earlier than planned and what it means for the country's fiscus.
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