South Africa pledges $4.9 billion Eskom bailout

South Africa’s struggling state-owned monopoly power utility company, Eskom is set to receive a bailout.

The debt-laden firm will receive 4.9 billion US dollars, the biggest bailout in the nation’s history after the government stepped in to prevent its collapse.

According to Finance Minister Tito Mboweni, the emergency funds will be meted out over three years.

“We are setting aside 23 billion rand a year to financially support Eskom during its reconfiguration. The fiscal support, this is very important, is conditional on the appointment of an independent chief reorganization officer, who will be jointly appointed by the minister of finance and the minister of public enterprises,” said Mboweni.

Recently, South Africa battled with the worst power cuts in several years designed to prevent a total collapse of the overstretched electricity grid.

In regards to this, the government is considering splitting Eskom into three companies, generation, transmission and distribution.

Reuters