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Can South Africa’s Eskom be Saved? Eskom Has Fourth Straight Loss as Debt Eases

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Following decades of government funding, guarantees and private debt financing, Eskom continues to be a debt trap.  The state-owned power utility again posted a fourth consecutive annual loss as it continued to service a mountain of debt, repaired aging plants and lost electricity revenue because of a drop in demand caused by the coronavirus pandemic. 

Eskom Holdings SOC Ltd.’s loss narrowed to 18.9 billion rand ($1.31 billion) in the year through March, from 20.8 billion rand a year earlier, Chief Executive Officer Andre De Ruyter said at a briefing on Tuesday. After growing unabated for about 15 years, the utility’s gross debt fell 17% to 401.8 billion rand, thanks to a cash injection from the government. But without government support it remains unsustainable to service.

Electricity sales dropped 6.7% from the previous year because of lockdown restrictions to curb the spread of Covid-19, the company said. The utility has made progress in reducing its headcount by about 10,000 workers by 2024 from peak levels.

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