Power utility Eskom has appointed Martin Buys as acting chief financial officer (CFO) with immediate effect and until further notice.
Buys was previously the group’s general manager for finance. He started his career at Eskom in 1987 and has held various roles – predominantly within the field of finance – during his 40-plus years at the company.
Buys takes over from Calib Cassim, who became Eskom’s interim chief executive officer following the exit of former CEO Andre de Ruyter near the end of February.
Buys will likely have a lot on his plate, with Eskom’s finances remaining dire.
The group’s latest interim financial statements published this Friday (31 March) have noted concern over the deterioration in some of the company’s financial indicators compared to the year before.
Eskom said that there is also concern over the fact that the company is in a ‘debt-reliant liquidity situation’ resulting from low tariffs, stagnant and contracting sales volumes, above-inflation cost increases and constrained generation performance.
The company has, however, through the National Treasury, been granted a total debt-relief arrangement of R254 billion to be provided in two parts, namely:
- R184 billion – representing Eskoms full debt settlement requirement in three parts over the medium term.
- R70 billion – a direct take-over of Eskom loan portfolio in 2025/26.
According to Jan Friedrich, a senior director at the international ratings agency Fitch, the taking on of Eskom’s debt makes up roughly 0.5% of GDP.
Friedrich added that the debt relief would come primarily through stock-flow adjustments extending the government’s already wide debt. This, however, was no surprise with the government talking about taking on the debt for a long period, he added.
According to the South African Reserve Bank (SARB), taking on the debt aims to improve the company’s overall balance sheet and enable the availability of funding for maintenance.
“The scale of the debt relief is such that it increases government borrowing to the extent that gross loan debt now stabilises later than originally projected, at 73.6% of gross domestic product (GDP) in fiscal 2025/26,” said the central bank.
Despite internal changes, load shedding continues to plague the country. This Friday, Eskom broke away from the trend of the last two weeks and pushed load shedding up to stage 4 for the coming weekend.
The company cited higher-than-expected demand as the primary driver for the increase in rolling blackouts. Coming into winter, the situation is likely to worsen.
Alan Winde, the premier of the Western Cape province, said that delays in completing planned maintenance on the country’s sole nuclear power station are raising concerns coming into winter when electricity demand heightens.
Winde said that it is important for the Koeberg plant in north Cape Town to be completed on time. If not, South Africans could be in for a cold and dark winter.