The National Economic Development and Labour Council (NEDLAC) has reportedly reached an agreement to mobilise funds for Eskom – but it does not specifically pledge using pension funds.
This is according to a Bloomberg report published on Thursday. The agreement will reportedly be signed at the next meeting of the President’s Working Council.
In December last year, labour federation COSATU tabled a proposal at NEDLAC for the Government Employees Pension Fund, through the Public Investments Corporation (PIC), to take over R250 billion of Eskom’s debt, which now stands at R480 billion.
NEDLAC brings together government, business, labour and community representatives. President Cyril Ramaphosa appeared to back COSATU’s proposal during a question-and-answer session with the South National Editors’ Forum (SANEF) in March.
He said, “Pension funds shouldn’t be too fearful; we’ve got an Eskom journey ahead. We also want the private sector to put their money in Eskom. We need to build up confidence.
“Where is the money in our country? In our pension funds. The Reserve Bank estimates [that] there are over R8 trillion in pension funds. Imagine if 10 percent of that went into alternative investments – that’s R800 billion for Eskom and water projects.”
‘No firm undertaking’
However, Business Unity South Africa (BUSA) CEO Cas Coovadia told Bloomberg that the agreement has “no firm undertaking” to use pension funds to take on part of Eskom’s debt.
COSATU’s parliamentary coordinator Mathew Parks added, “We just said all possible public and private financial support for Eskom and to reduce its debt must be mobilised. We kept it high level.”
In March, Democratic Alliance (DA) said it would do everything in its power to stop the government from using pension funds to save Eskom – even if it means going to the Constitutional Court.
In a statement, DA Chief Whip Natasha Mazzone said it was “unconscionable” for Ramaphosa to “pander to the ideas of trade unions to flush pension funds down an endless hole of debt.”
ANC discussion paper
Nevertheless, the African National Congress (ANC) released an economic recovery discussion paper last month that said pension funds could be “mobilised” to take over Eskom’s assets.
The paper said, “There is a need for continued support for Eskom to overcome its immediate financial and technical challenges and to ensure reliable electricity supply.
“A solution needs to be found to Eskom’s debt problem, including the possibility of pension funds being mobilised to take over certain restructured Eskom assets.”