State must disclose details of Eskom loan from China bank

2018-09-09 22:26

DA leader Mmusi Maimane is set to submit a Promotion of Access to Information Act application to Eskom requesting details of the power utility’s R33 billion loan from the China Development Bank (CDB).

Maimane said he was doing this following President Cyril Ramaphosa’s failure to heed the party’s earlier request made in Parliament that it be provided with all material terms and conditions of the loan within 14 days.

Maimane’s fears about the kind of conditions that China would have required from Eskom were accentuated by news reports that China had taken over Zambia’s power utility after the country failed to honour its debt, and his worry is that China would be as ruthless with Eskom should it default on the loan.

“I will therefore submit a request to Eskom in terms of the Promotion of Access to Information Act for the terms and conditions of this loan to be made public,” Maimane said.

“This record needs to include the interest rates agreed to, repayment terms, guarantees, default terms, total amount payable, loan amount, total interest charged and annual percentage rate.

“South Africa’s repayment liability cannot remain cloaked in secrecy. If the president is as confident about this loan as he is about the government’s economic stimulus package, he should have no problem with disclosing the terms and conditions of the Eskom-CDB loan,” he added.

Maimane said the request, which would be submitted tomorrow, also came after Eskom chairperson Jabu Mabuza, during a Public Enterprises and Energy Joint Portfolio Committee meeting last week, committed to providing a list of the loans with the financial details, interest and base rates, but without the names of the lenders.

In his earlier letter to Ramaphosa, Maimane alluded to the fact that the CDB would not have given Eskom the government guaranteed loan without rigorous protection against default, which is not a remote possibility given Eskom’s undesirable financial position.

“Sri Lanka had to give up its port and 15 000 hectares of land when it could not pay back the Chinese Development Bank. South Africa cannot be sold to the highest bidder. A central tenet of state capture was secrecy between government and extra-state institutions. Government needs to break away from the era of secrecy your predecessor ushered in,” Maimane said in the letter.

According to Eskom, the loan, which was signed during the recent Brics summit, is meant to fund the construction of the coal-fired Kusile Power Station.

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January 26 2020