* Eskom loses R20.5 bln rand vs R20.9 bln in pvs year
* But sees larger loss this year due to COVID
* Reliant on government cash injections
* Massive debt load threatens wider economy (Adds details, background)
JOHANNESBURG, Oct 30 (Reuters) - South African power utility Eskom slightly narrowed its net loss to 20.5 billion rand ($1.3 billion) in the financial year that ended in March 2020 but expects a larger loss this year because of the impact of COVID-19, it said on Friday.
The state company also said its debt rose to about 484 billion rand -- equivalent to about 9% of the country’s gross domestic product -- from roughly 441 billion rand in March 2019.
Eskom struggles to power Africa’s most industrialised economy and is heavily reliant on government bailouts. Its massive debt burden places the wider economy at risk, credit rating agencies and analysts say.
Eskom’s financial performance last year - an improvement on a 20.9 billion rand loss in the year that ended March 2019 - was helped by a higher average electricity price, which lifted revenue. But that was countered to some extent by higher coal and debt-service costs.
This year, Eskom sees an economic recession and uncertainty linked to the coronavirus pandemic hurting electricity sales, leading to a loss of 26.2 billion rand, it said.
Chief Financial Officer Calib Cassim said it was not sustainable that gross interest costs were now the utility’s second-largest cost item after coal costs -- more than capital expenditure.
He said Eskom was aiming for cumulative cost savings of 62 billion rand by 2023, but that those savings alone would not be enough to save the utility’s finances. Eskom needed further electricity price increases and lower debt to ensure long-term sustainability, Cassim added.
Eskom hopes to be profitable in the year to March 2023, a results presentation showed.
Chief Executive Andre de Ruyter said there could be about 200 billion rand of “green financing” potentially available, as the company looks for ways to cut interest payments. De Ruyter has previously said Eskom is in talks with development finance institutions about funding linked to accelerated decarbonisation.
$1 = 16.1622 rand Reporting by Alexander Winning; Editing by David Goodman and Emelia Sithole-Matarise
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