FinMin Mboweni: PIC to "Aid" Eskom; Rejects World Bank $2bn Loan Conditions

KEY POINTS

• PIC possibly stepping in to offset Eskom's debt spiral (R484bn total), despite other pension funds reducing exposure to SOEs.
• May see public pushback, however, as pensions a touchy subject.
• How much "aid" will be key going forward as Eskom's debt servicing costs (R40bn/yr) currently dwarf operating profits as seen in Eskom earnings.
• Whether this will be supported by UIF allocations or Govt moving some debt onto its balance sheet remains to be seen.
• Possible public participation in SAA equity offering could speak to an unwillingness of foreigners to prop up the indebted airline - no word from key partners, such as Ethiopian Airlines on partnerships.
• Direct call to unions to assist in restructuring and bring down the public wage bill after saying SA cannot accept World bank $2bn loan conditions linked to public sector wage cuts and no further SOE bailouts.
• Some progress on retrenchments has been noted in key labour court rulings vs unions at Comair and possibly SABC (if they go through with retrenchments) - but further signs of implementation needed to be call a credible turnaround.