In a significant move to alleviate the financial burdens of South Africa’s struggling power utility, Eskom, the National Council of Provinces (NCOP) has adopted the Eskom Debt Relief Bill.
The bill, proposed by Finance Minister Enoch Godongwana, aims to address Eskom’s mounting debt crisis by writing off a staggering R254 billion of the utility’s debt over the next three financial years.
The decision was reached after a voting session in the NCOP on Wednesday, where 30 delegates voted in favour of the bill, while 18 voted against it. This approval solidifies the government’s recognition that Eskom is unable to settle its debt using its own cash flow, necessitating intervention to prevent further financial strain on the state-owned enterprise.
NCOP chairperson Amos Masondo announced the voting results, stating, “The results from the table are as follows. In favor 30, against 18, absentia 0. The bill is therefore agreed to in terms of Section 75 of the Constitution.”
If signed into law by the president, this intervention will entail the National Treasury assuming control of more than half of Eskom’s overall debt, which currently stands at R400 billion. The debt relief package will be implemented over the next three years, allowing Eskom financial stability and flexibility to focus on revitalising the country’s energy sector.
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