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Eskom Sees Debt Allocation Changing as Loans are Settled

South Africa’s plan to split state power utility Eskom Holdings SOC Ltd. into three units envisions most of its 439 billion rand ($23.6 billion) of debt being allocated to the generation business, which utilized most of the money. About 40 billion rand of debt will be held by the transmission unit, which is expected to be established this year, and 30 billion rand by the distribution unit, with the balance going to the generation division, Eskom said. Eskom is in dire financial straits because it isn’t generating enough income to cover its operating costs and service its loans. Acute breakdowns of its poorly maintained coal-fired plants have set back efforts to restore it to profitability and resulted in record national electricity shortages. The creation of a standalone transmission company will still require operating licenses from the regulator and the consent of lenders, processes that could be finalized by the end of August, Rand Merchant Bank analysts said.