Latest news with #debtburden
Zawya
17-07-2025
- Business
- Zawya
South Africa: Eskom aims to generate 32GW of renewable energy by 2040
Eskom aims to shift to mainly clean energy sources by 2040 from its current predominantly coal-based generation fleet, it said as it laid out its latest plans for the change. Eskom aims to have 32GW of renewable energy capacity by 2040, compared to less than 1GW now, while it wants its coal capacity to shrink from 39GW to 18GW over that time, a company presentation on its energy sources to lawmakers showed. Eskom said it would roll out renewable energy projects through a combination of 'repowering' older coal-fired power stations slated for closure and new projects. Repowering involves replacing old power-generation equipment with newer technology. Eskom has identified several old coal plants where it will replace generating units with renewable energy or gas-fired plants. Eskom will have an in-house renewable energy business unit to implement projects and partner with private companies. Among obstacles to its clean-energy goals, Eskom cited its R400bn debt burden, which it said continued to slow investment in renewable energy. It also mentioned growing debts it owes by South African municipalities and uncertainty over regulated power tariffs, which it argues are below the level required to cover its costs. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
Zawya
17-07-2025
- Business
- Zawya
Committee on Electricity Warns Against Job Losses as a Result of Just Energy Transition Plan
AFRICA The Portfolio Committee on Electricity and Energy expressed its concern over potential job losses as a result of the Just Energy Transition (JET) plan when it received a briefing from Eskom on the revised plan, decoupled from the decommissioning of plants. The Eskom JET strategy has been decoupled from the decommissioning schedule to ensure independence from plant operations. Eskom's plan promotes the optimal use of the existing coal fleet while rolling out clean energy capacity to ensure security of supply and energy sustainability. The committee engaged with the power utility on its R400 billion debt burden along with limited government support, as the fiscus cannot keep funding Eskom in the way it has in the past. Also, due to the inflated cost of electricity, the entity has declining energy sales, escalating municipal debt and less than cost-reflective tariffs. The committee demanded an explanation from Eskom on how it plans to secure the substantial assistance and sustained funding required for the entire JET, including the estimated R257 billion for a minimum emission standards compliance and the 14,000 km of grid expansion needed by 2034. Eskom said that it has a commitment to reduce emissions by 40% by 2030. Regarding minimisation of any disruption that might occur, Eskom said that the transition not only includes sustainability but also energy security and affordability. The power utility stated that in its communication, it has been indicating that coal is not an issue. But to manage the transition, the entity uses technology to make it safe to reduce emissions. The committee heard that Eskom will not shut down coal-powered stations for the sake of shutdown and disrupt the economy but, where it is possible, coal will be used as optimally and efficiently as possible within the ambit of the commitments made. Regarding the strategies that are being implemented to mitigate the risks of funding delays and the impact of the US withdrawal from the International Partners Group, Eskom said the dynamics and changes from the US have changed how the power entity traditionally views funding. However, Eskom believes that change comes with opportunity. Eskom told the committee that the entity also engaged with the World Bank to source funding from various international funders. The committee heard that funders are aware of their five-year project from the discussions already undertaken. Regarding job losses due to the closure of the coal power stations and the JET plan, Eskom told the committee that it wants to grow the economy on all fronts, while continuously using all the available resources to meet emission targets. The committee noted the difficulties arising from the decommissioning of power stations, which include job losses and economic and social impacts. The committee expressed its appreciation to Eskom for stabilising the grid and avoiding loadshedding for a sustained period. The committee told Eskom that nuclear energy is probably the safest and cleanest energy source available. Members of the committee advised Eskom about the possibility of considering the new technology of using nuclear waste stored at fire pits for generating electricity. Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an 'as is' and 'as available' basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release. The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk. To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
Telegraph
15-07-2025
- Business
- Telegraph
Tax raid not enough to fix debt crisis, OBR chief warns
The chairman of the Office for Budget Responsibility (OBR) has warned that further tax rises will hit growth and fail to tackle the country's growing debt burden. Speaking to the Commons Treasury Select Committee, Richard Hughes said there were 'reasons to be concerned about the level of UK government debt' and suggested taxes alone would not be enough to address the issue. 'Higher and higher levels of taxes are also not good for growth,' he said, suggesting a fresh raid in the autumn could prove self-defeating. 'We have also already raised taxes quite a bit in this country. The tax burden is getting close to an all-time high,' Mr Hughes told the committee. The difference between the interest rate on government debt and economic growth makes it 'harder to stabilise the debt to GDP ratio', the OBR chairman added. 'Increasingly vulnerable' His testimony followed the publication of the OBR's Fiscal Risks and Sustainability Report last week which warned that Britain's economy was 'increasingly vulnerable'. The report from the fiscal watchdog painted a grim picture for the UK's finances and warned that without action, debt as a share of GDP would rocket from almost 100pc today to over 270pc over the next 50 years. Mr Hughes raised concerns that the British economy was particularly vulnerable to future shocks. 'We are a country which is very exposed to shocks [and] has been particularly hard hit by the last three shocks which the world has faced – the financial crisis, Covid and the energy crisis. In each case we took quite a hard hit economically and fiscally from those shocks,' Mr Hughes told the Commons committee. 'There are reasons to be concerned about the level of UK government debt.' The UK's government debt is the fourth-highest amongst advanced European economies and the country faces the third-highest borrowing costs of any advanced economy after New Zealand and Iceland. Concerns about the sustainability of the UK's debt comes after the OBR's Fiscal Risks report warned that the 'scale and array of risks to the UK fiscal outlook remains daunting.' The fiscal watchdog said successive Tory and Labour governments had failed to make any progress on tackling public debt. UK government debt currently stands at around £2.7 trillion, with the Government's interest bill this year expected to be around £100bn. David Miles, a member of the OBR's budget responsibility committee, warned that the decline in full-salary pensions schemes, which were traditionally big buyers of UK government debt, could push up long-term borrowing costs by as much as £20bn. Costly U-turns The warning comes as the country braces for a fresh tax raid in the autumn. It is almost certain that the Chancellor will have to push taxes higher in order to make up a shortfall in the Government's finances and ensure she doesn't break her 'iron-clad' fiscal rules. A series of costly U-turns by the Government on disability benefits and winter fuel payments have left the Chancellor scrambling to find billions of pounds. Economists have warned that the Chancellor is facing a black hole of between £10bn to £20bn in the autumn Budget. No 10 has refused to rule out a wealth tax after Lord Kinnock, the former Labour leader, said the party was 'willing to explore' the idea. He added that the Government could raise an extra £10bn a year by imposing a 2pc tax on assets worth more than £10m.
Bloomberg
15-07-2025
- Business
- Bloomberg
S&P Cuts Senegal's Credit Rating for Second Time in Five Months
S&P Global Ratings cut Senegal's credit rating further into junk for a second time in five months, citing the West African nation's rising debt burden. Senegal's long-term foreign currency debt was cut to B- from B, the second reduction since February, to the lowest since the rating company first assessed the sovereign in 2000.
Reuters
15-07-2025
- Business
- Reuters
Japan election angst has bond investors girding for jump in super-long yields
TOKYO, July 15 (Reuters) - Japanese government bond investors are bracing for a potential power shift in upper house elections this weekend that could end up worsening the country's already frail finances. Prime Minister Shigeru Ishiba's sliding popularity has analysts and investors questioning whether even his modest goal of retaining a majority is achievable. Defeat could bring anything from a shift in the composition of the coalition to Ishiba's resignation, though even the least disruptive scenario is still expected to see more stimulus-minded political viewpoints gain sway. "As the noise towards yet more fiscal spending picks up, we have increased our underweight in Japan as a whole," said Ales Koutny, head of international rates at Vanguard. "Japan is going down a similar path as the UK did a couple of years ago," Koutny said. "If no fiscal restraint, then the bond market will start to put pressure on the economy." Japan's debt burden is the highest in the developed world at about 250% of GDP. Concerns about promises of fiscal largesse from opposition parties backing tax cuts were instrumental in sending yields on Japan's longest-dated government bonds (JGBs) surging to record peaks in late May. The Ministry of Finance was able to restore some calm to the market with plans to reduce issuance of 20-, 30- and 40-year bonds to address a supply-demand imbalance for those tenors, with traditional demand from life insurers dropping sharply this year. The Bank of Japan's reticence to raise interest rates further against an uncertain global economic backdrop is also keeping investors sidelined. "If such a demand-less market continues and investors foresee no rate hikes within this fiscal year, JGB volatility will go up, especially in the long end," said Kentaro Hatono, a fund manager at Asset Management One, who says he's adopting a "wait-and-see" stance due to the risks of the yield curve steepening after the election outcome. The persistent fragility of the so-called super-long sector has been on display for the past week, as opinion polls showed a sharp drop in Ishiba's approval ratings. Benchmark 30-year JGB yields vaulted 13 basis points to 3.17% on Monday, bringing them just shy of the all-time high of 3.185% from May 21. A week earlier, those same yields had surged as much as 22.5 basis points over two days to 3.09% on July 8. Barclays calculates that the rise in 30-year yields currently factors in about a three percentage-point cut to Japan's 10% consumption tax rate. "Even if the ruling parties retain their majority in the upper house, they would still be unable to pass budget bills, including the upcoming supplementary budget, without the cooperation of the opposition parties," the bank's Japan-based analysts wrote in a research note. "In this context, we believe there will likely be a convergence toward an expansionary budget proposal." All three of the leading opposition parties espouse some form of consumption tax cuts, with the populist, right-wing Sanseito party proposing a phasing out of VAT altogether. The policy has gained sway with the public as well: a recent poll by the Asahi newspaper showed 68% of voters thought a sales tax cut was the best way to cushion the blow from rising living costs. Fiscally hawkish Ishiba has eschewed that option in favour of cash handouts. A poor election result for the ruling coalition will trigger a sell-off in super-long JGBs by so-called real money investors, including life insurers and institutional investors, predicts Toshinobu Chiba, a fund manager at Simplex Asset Management. "If the opposition parties win, the government deficit will see a huge expansion," Chiba said. "The JGB yield curve will steepen by a lot."
