Question NW2064 to the Minister of Finance
10 December 2024 - NW2064
Niehaus, Mr CG to ask the Minister of Finance
(1) What (a)(i) domestic and (ii) foreign companies own the Eskom debt, (b) are the details and/or breakdown of the specified Eskom debt and (c) are the details of how the debt is being serviced. (2) whether a certain person (name and details furnished) owns the bulk of the Eskom debt, together with other partners (details furnished); if not, what is the position in this regard; if so, what are the full relevant details? NW3339E
Reply:
(1)
(a) (i) Domestic Loans
1. The Development Bank of Southern Africa.
2. Standard Bank.
(ii) Foreign Loans
- Multilateral Development Bank including - International Bank for Reconstruction Development, African Development Bank, and New Development Bank.
- Bilateral Development Banks including KfW, French Development Agency, and China Development Bank.
- Export Credit Agency / MIGA / Government-backed facilities including, but not limited to, AFREXIM, US EXIM, KfW - IPEX, BNP Paribas, Credit Agricole, Mizuho, Deutsche Bank.
Domestic and foreign bonds are held by various investors including investment managers, pension funds, insurance companies and banks.
The investors with larger exposure to Eskom’s domestic bonds are the Public Investment Corporation (SOC) Ltd, Old Mutual Investment Group (South Africa) (Pty) Ltd, STANLIB Asset Management (Pty) Ltd, MandG Investments Southern Africa (Pty) Ltd., Ninety One SA (Pty) Ltd, Momentum Metropolitan Life Limited, Sanlam Investment Management (Pty) Ltd., Standard Bank of South Africa Limited, Colourfield Liability Solutions (Pty) Ltd., RMB Capital Management LLC, Absa Bank Ltd. and Allan Gray (Pty) Ltd.
The investors with larger exposure to foreign Eskom bonds are BlackRock Advisors (UK) Ltd., GIC Private Limited, PGIM, Inc., Fidelity Management & Research Co. LLC, TCW Investment Management Co LLC, Barclays Bank PLC, Goldman Sachs International, Massachusetts Financial Services Co., Invesco Asset Management Ltd., JPMorgan Investment Management, Inc. Teachers Insurance & Annuity Association of America, and Goldman Sachs Asset Management. (Data as at December 2022, Independent Source)
Note: Eskom Treasury has no means of verifying the ultimate holder of the freely-traded financial instruments.
(b) & (c).
The debt has been raised to fund Eskom’s capital expenditure. The debt raised consists of mostly long-dated maturities with the longest tenor being more than 20 years and shorter-dated debt between five to seven years. Interest rates vary per category of lender with Development Finance Institutions (DFI) being the cheapest, and the bonds and commercial bank facilities being priced at a premium to the DFIs. Most foreign debt is in foreign currency. Eskom protects itself against movements in foreign currency against the local currency. Some of the debt is amortized over several years while others (bonds in particular) are payable as bullet payments.
Historically, the debt has been serviced by cash flow generated from operations. The R254 billion debt relief package that was announced by the government is used to cover the debt service costs over the three financial years ending in March 2026. During this period, Eskom is not allowed to issue new debt without the consent of the Minister of Finance.
(2).
Eskom does not have debt with the renewable energy producers. The National Treasury is unable to provide further information to this question beyond what is stated.