South Africa’s utility services provider Eskom is seeking a 32% increase in power tariff for 2023/24 to resolve its debt crisis, chief financial officer Calib Cassim has said.

The 32% increase is due to massive escalations in Eskom’s cost assumptions, he said, the news24 portal reported, citing Cassim. 

The company, which previously expected to spend 5 billion rands ($282.95 million) on diesel next year, revised the projection to 16 billion rands. It plans to recover 15 billion rands from consumers to help its sustainability drive.

Despite the possibility of the government waiving 200 billion rands, Cassim stated that Eskom would return to the same position if it didn’t raise tariffs, reduce costs and receive consumer payments on time. 

Eskom has 400 billion rands unserviced debt, therefore, seeking annual bailouts from the treasury.

Cassim requested the National Energy Regulator of South Africa (Nersa) that the due amounts be allocated directly to the revenue of Eskom’s new transmission and distribution companies, which will help the business units to achieve cost-reflectiveness.

According to the newspaper, Eskom had applied for a 20.5% increase in 2022/23 but was granted 9.6% by Nersa. 

(Editing by Seban Scaria