South Africa's Eskom cuts debt by 20%, minister says

CAPE TOWN, May 25 (Reuters) - Struggling South African power utility Eskom has cut its debt by almost a fifth, the most among indebted state firms, the country’s public enterprises minister said on Tuesday.

Eskom’s troubles have long cast a shadow over Africa’s most industrialised country, with ratings agencies citing its debt as a key risk to an economy struggling to rebound from recession.

The company embarked on a massive restructuring programme to split into three entities and has moved to improve its operations to lower costs and boost power generation capacity.

“Most notably was the 83 billion rand reduction in debt in the 2021 financial year, from 484 billion rand to 401 billion rand due to the repayment of the maturing debt and changes in the exchange rate,” Pravin Gordhan told lawmakers.

Eskom has net debt of 460 billion to 485 billion rand ($35 billion), its chief executive said in February.

Relying mainly on ageing coal-fired plants to generate electricity, Eskom regularly cuts power to the national grid in a controlled effort to prevent a complete shutdown, as it struggles to generate enough power to keep the lights on. ($1 = 13.8225 rand) (Reporting by Wendell Roelf; Editing by Alexander Smith)