Johannesburg - A government task team could make a proposal at next month's first cabinet meeting about the details of the R60 billion in funding that the state will provide for Eskom's R343 billion expansion in the next five years.
Nelisiwe Magubane, the deputy director-general of electricity and nuclear, said on Friday that it was too early to say whether the R60 billion funding would be a cash injection or a loan. The focus on the task team was to maintain Eskom's credit rating, she added.
The timing and terms of the state's bailout of Eskom will affect credit rating agency assessments of the utility's ability to pay back its debts.
The agencies' decision on Eskom's creditworthiness will in turn affect the cost at which it can borrow money.
Bloomberg reported on Friday that finance minister Trevor Manuel said the treasury was seeking the best funding strategy for Eskom.
However, Manuel said Eskom must eventually return to funding projects from its own balance sheet.
Reuters quoted Manuel as saying the decision by the National Energy Regulator of SA (Nersa) to raise tariffs by an average of 27.5 percent in the year to next March had brought more clarity about what funding Eskom still needed.
This month Collin Matjila, the chairman of Nersa, called on the government to accelerate its lending to Eskom to R12 billion a year for five years, under a R60 billion state loan.
At present, the government plans to forward R6 billion in the year to March, followed by R54 billion over four years.
Vimla Maistry, the spokesperson for the department of public enterprises, said she did not know when the injection details would be finalised.
Craig Jamieson, the general manager of Moody's South Africa, said the rating agency would like to conclude its review of the utility's credit rating for a downgrade sooner rather than later.
Moody's placed Eskom on a review for a credit downgrade on May 20.
Jamieson said the agency usually completed its reviews of this kind within 60 days. But he added that the nature of the government's intervention at Eskom would be a vital component of the agency's assessment. Eskom would have to come up with a model to demonstrate its funding gap.
He said finalisation of the credit rating was important so Eskom could start raising more debt to fund its expansion.