There are growing global calls for a debt write-off for developing countries because of Covid-19. Eskom received a $3.75-billion loan from the World Bank in 2010, intended mostly for the construction of Medupi. Writing off this debt would be a good start.
For many South Africans, one of the only good news stories around the Covid-19 lockdown is that load shedding is (apparently) on hold. But the reasons for that, combined with the likely state of the post-lockdown economy, is very bad news.
Load shedding pressure is off because electricity demand has declined sharply under the lockdown. In the post-lockdown economy, activity will almost certainly be significantly down on the previous year, which means less demand for electricity, and less income for Eskom. Many households will be under severe financial pressure for an extended period.
We should, therefore, expect that the number of households that are unable to pay their electricity accounts will increase sharply. More and more people will have to choose between paying their accounts or feeding their children. Given the economic impact of the coronavirus pandemic, there will be considerable pressure on household electricity providers (municipalities and Eskom itself) not to disconnect defaulting clients. This will provide...