June 18, 2019 / 2:38 PM / 4 months ago

UPDATE 1-South Africa's Ramaphosa to announce more support for Eskom

(Adds more details)

JOHANNESBURG, June 18 (Reuters) - South Africa’s President Cyril Ramaphosa will announce more measures to support power utility Eskom, his office said on Tuesday, as the government aims to fix the highly-indebted firm whose troubles threaten to derail plans to grow the economy.

Ramaphosa has prioritised restoring the ailing utility in his new five-year term with government having pledged a 23 billion rand ($1.6 billion) a year bailout for Eskom over the next three years.

“It is expected that the President will announce further measures to support Eskom’s efforts at recovery and financial and operational sustainability,” the presidency said in a statement, following a meeting between Ramaphosa and Eskom’s board.

The presidency did not say when the measures would be announced, but Ramaphosa is scheduled to make his State of the Nation address on Thursday.

During the meeting, Eskom’s board presented a report on the implementation of the utility’s turnaround plan that includes cutting costs, driving efficiencies and increasing revenue through, among other factors, higher collection rates, the presidency said.

Eskom faces generation capacity constraints and South Africa has been plagued by power cuts in the past year, undermining broader efforts to kick-start growth.

The utility is regularly cited by ratings agencies as one of the main threats to the country’s creditworthiness and economic growth. ($1 = 14.5356 rand) (Reporting by Olivia Kumwenda-Mtambo, editing by Louise Heavens)

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