It does not appear that state pensions are any longer part of a plan to pay off Eskom’s debt.
Bloomberg reports that there is no fixed company in an agreement between the government, trade unions and businesses, to use money from state pensions or money from private pensions to reduce Eskom’s debt.
Eskom’s debt currently amounts to about R450 billion.
This agreement will apparently be signed at the next meeting of the president’s working council.
Cas Coovadia, CEO of Business Unity South Africa (Busa), shared this information in an interview with Bloomberg.
Government officials’ pension money is managed by the Public Investment Corporation (PIC).
The PIC has assets worth about R2 100 billion under management.
The trade union Cosatu proposed in December that the PIC and / or the Development Bank of Southern Africa should be approached to get money for debt relief to Eskom.
In July, Bloomberg reported that the PIC apparently still considered an agreement to convert Eskom’s debt of R70 billion into equity.
The PIC holds 20% of all Eskom’s bonds and is therefore the largest holder of Eskom debt.
“We have just said that all possible public and private financial support must be mobilized to reduce Eskom’s debt,” said Matthew Parks, Cosatu’s parliamentary coordinator.
A date has not yet been set for the meeting at which the agreement is to be signed. It would have taken place on August 3, but was postponed.
Cosatu’s initial proposal raises concerns that pension funds could be forced to invest in Eskom through the use of so-called prescribed assets. Business leaders, including Coovadia, have said that while private investors are willing to invest in state-owned enterprises and infrastructure, they do not want to be forced or prescribed to do so, and must earn an acceptable return on their investment.
