Pension funds option for Eskom debt still on table
President Cyril Ramaphosa says he is still pursuing a controversial plan which will see government pension funds used to reduce Eskom’s debt, reports Fin24.
He was responding to questions at a merdia briefing at Parliament on Friday.
Eskom – with debt in the region of R380bn that it is unable to service – has relied on National Treasury for the past three years to pay a large part of its debt service costs.
But for as long as Eskom’s quantum of debt remains so high, the company will be unable to borrow to make new investments in energy capacity.
Ramaphosa referred to a proposal made by Cosatu a year or two ago in the National Economic & Development Council, which suggested that the Government Employees' Pension Fund (GEPF) convert debt it holds in Eskom to an ownership or equity stake.
This proposal caused alarm among members of the GEPF, who were concerned it could endanger their savings.
The management of the GEPF has in the past been reluctant to embrace the proposal.
‘This matter has been in discussion at GEPF level and it is a matter that can still be taken forward. I do not see it as a measure that could collapse government pension funds as these are long-term funds and not everybody retires at the same time. This proposal is still on the table,’ he said.
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