Finance minister Enoch Godongwana has revealed that BlackRock, the world’s largest asset manager, holds the majority of Eskom’s foreign bonds, while Africa’s biggest fund manager, the Public Investment Corporation (PIC), has the largest domestic exposure to the state-owned utility’s debt.
Godongwana’s disclosure in response to a parliamentary question from EFF MP Carl Niehaus offered a detailed breakdown of Eskom’s creditors.
The utility’s domestic creditors include the Development Bank of Southern Africa, Standard Bank, Absa, Old Mutual Investment Group, Momentum Metropolitan Life, Sanlam Investment Management, Stanlib, Allan Gray and Ninety One SA, as well as other big financial institutions.
Foreign loans are held by a range of bilateral and multilateral development banks, including African Development Bank and New Development Bank, export credit agencies such as Export — Import Bank of the US, and commercial banks including Deutsche Bank and BNP Paribas.
BlackRock’s exposure to Eskom represented the largest of foreign investors, alongside other international firms such as Fidelity Investments, Barclays and JPMorgan Investment Management, the minister said. Eskom’s treasury could not verify the ultimate holders of freely traded financial instruments, however.
“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,” Godongwana said.
“Most foreign debt is in foreign currency. Eskom protects itself against movements in foreign currency against the local currency. Some of the debt is amortised over several years while others [bonds, in particular] are payable as bullet payments.”
In February 2023, Godongwana announced in his budget speech to parliament a R254bn debt relief package for Eskom to be disbursed over three years. This relief, nearly matching the R241.6bn in bailouts the power utility received from 2008/09 to 2022/23, was aimed at alleviating the financial strain on Eskom as South Africans endured rampant blackouts.
The relief came with strict conditions to ensure the effective use of the funds. These measures include Eskom paying interest on the relief loans and facing reductions in the allocated relief should it fail to meet the conditions set by the National Treasury. Eskom’s debt of R337bn already had government guarantees, while the utility received R21.9bn in equity support from shareholders in 2023.
The enforceability of these conditions was strengthened in November 2023 when Godongwana tabled the Eskom Debt Relief Amendment Bill during his medium-term budget policy statement. The bill, which became law in April 2024 following President Cyril Ramaphosa’s assent, ensures stricter compliance with the Treasury’s conditions under the relief agreement.
The utility revealed in its annual results that the relief package covered R89.8bn in debt servicing costs in the year to end-March 2024 and was fully converted into equity after Eskom complied with the conditions outlined in the Eskom Debt Relief Amendment Act.
By the financial year ending March 2024, Eskom had used R76bn of the relief funds to service its debt. The relief improved its liquidity and contributed to operational gains, including R16bn in diesel savings, it said.
According to Eskom, the relief has allowed the utility to focus on its operational strategy, improving generation recovery and unlocking investments in critical infrastructure. These efforts, combined with cost-reflective tariffs, led to a credit rating upgrade in November by S&P Global, signalling the utility’s improved financial stability. It upgraded Eskom’s credit rating from stable to positive, citing the impact of the government’s financial support.
The upgrade reflected confidence in Eskom’s ability to meet its debt servicing obligations through 2026, the utility said.
“This upgrade is a clear indicator of the progress we are making in strengthening Eskom’s financial and operational foundation. It sends a positive message to investors and stakeholders, reinforcing trust in our ability to deliver energy security while driving long-term sustainability,” Eskom CEO Dan Marokane said.
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