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Ramaphosa: Private Pension Funds Could Also Help Revamp Eskom

CAPE TOWN – President Cyril Ramaphosa on Tuesday said the government wanted private pension funds to invest in a revamped Eskom that he said would be well-run and corruption-free.

The Congress of South African Trade Unions (Cosatu) is already in talks with the government over its offer for state workers’ pension savings to be used to cut Eskom’s R450 billion debt by R250 billion, although a number of unions are opposed to this.

Last week, Finance Minister Tito Mboweni said this wouldn’t be fair unless private pension funds were also involved.

Ramaphosa was responding to questions during a meeting with the South African National Editors’ Forum (Sanef) and the parliamentary Press Gallery Association at Tuynhuys in Cape Town.

The president made it clear that the government is looking to private as well as state pension funds to help deal with Eskom’s towering mountain of debt.

“We would obviously like the private sector to also put their money into Eskom – and obviously their confidence needs to be built up as we move on, and we are going to continue building up the confidence of the private sector – so even private pension funds, we’d like them to put money into Eskom as we go ahead,” Ramaphosa said.

The apartheid regime compelled pension funds to invest up to 55% of their funds in prescribed assets between 1958 and 1989, which Ramaphosa said it helped build Eskom, Sasol, iron and steel corporation Iskor and the Industrial Development Corporation.

The president said Eskom could not borrow more and that South Africa’s savings were mostly held by pension funds.

“Pension funds should not be too fearful because we have got an Eskom journey that is well-plotted ahead, which is going to be corruption free.”