South African Utility Sees Higher Tariffs as Only Panacea to Financial Woes
- South African utility says power prices must rise at least 25%
- Talks with coal suppliers failed to result in cost savings
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South Africa’s embattled state power utility said its ballooning debt can only be kept in check if it’s paid cost-reflective tariffs because cost cutting offers limited respite and government bailouts are unsustainable.
Eskom Holdings SOC Ltd. executives told lawmakers on Wednesday that the company had amassed 488 billion rand ($27.3 billion) in debt by the end of March, almost 11% more than it owed a year earlier. The company’s finances have deteriorated despite the government having given it 188 billion rand in grants and loans over past decade.