Eskom 'will not run out of cash'

The government moved this week to allay fears that Eskom would run out of cash, while revealing that the power utility would receive R10-billion by June.

Speaking in Davos, Minister of Finance Nhlanhla Nene said that the government had identified assets that would be sold to help Eskom. Plans "are at an advanced stage, but at a sensitive stage" because it might be market-moving, Nene said, declining to identify the assets.

This comes as government leaders said Eskom would not run out of cash - despite reports in recent weeks that the utility had told Minister of Public Enterprises Lynne Brown that its resources would run dry by the end of January.

Both Brown and Nene said this week that these comments were misinterpreted, and it only faced a cash shortage when it came to buying diesel.

Eskom's financial director, Tsholofelo Molefe, told Business Day this week that "we never said we were running out of cash. What we did say is that we won't be irresponsible and spend money on diesel."

The utility is spending about R2-billion on diesel every month to provide additional power to the grid.

In October last year, Nene said the government would sell non-strategic state assets to raise R20-billion for Eskom to help plug its R225-billion hole. Analysts from Barclays said this month that the government's 14% stake in Vodacom and 40% of Telkom would be the quickest to sell.

Eskom, which generates 95% of South Africa's power, started rolling blackouts in November last year and warned this month of almost-daily cuts until April.

Bank of America Merrill Lynch estimates that three months of outages may shave one percentage point off the economic growth rate. On Tuesday the International Monetary Fund cut its 2015 growth forecast for Africa's second-largest economy to 2.1% from 2.3%.

Nene said in a panel discussion in Davos that consumers weren't receiving the full benefit of lower oil prices because of the weaker rand.