ESKOM HOLDINGS SOC LIMITED - Eskom notes High Court judgement on its revenue case against NERSA

Eskom notes High Court judgement on its revenue case against NERSA

Eskom Holdings SOC Limited
(Registration No. 2002/015527/06)
JSE alpha code: BIESKM
(“Eskom”)

Eskom notes High Court judgement on its revenue case against NERSA

Eskom acknowledges the High Court judgement handed down in the North Gauteng High Court this
morning in relation to its application for urgent relief on the case it brought against the National Energy
Regulator of South Africa (NERSA), where it was seeking the court to review and set aside NERSA’s
decision on its multi-year price determination (MYPD 4). The court has decided that the matter is not
urgent, but the merits of the R69 billion will still be heard as Part B of the review process.

Calib Cassim, Eskom’s Chief Financial Officer says, “We understand and respect the decision of the
Court and will follow its guidance on the matter. Our case had two parts, the first (Part A) where we
were asking that the matter be heard urgently in order to enable Eskom to receive and implement a
tariff decision before the beginning of the financial year in April 2020 and the second (Part B), which is
the hearing of the matter itself where Eskom is challenging the regulator’s decision on its treatment of
the shareholder equity in its MYPD 4 decision”.

“At the root of the matter is the fact that we do not agree with NERSA’s deduction of the R23 billion
that we received from the shareholder, treating it as revenue. We are therefore encouraged by the fact
that while the judgement says the matter is not urgent, it was indicated that there is merit in our case.
The judge indicated that ‘NERSA violated the basic principle of accounting by treating an equity
injection as revenue’. He continued to say, ‘the reasonable judgement that NERSA is allowed to
exercise cannot translate into an open ended discretion that insulates it from scrutiny and judicial
review…it must accordingly be arguable that the decision by NERSA in its treatment of the R23 billion
equity is open to review and possible attack’. We will await the next phase of the court case in order to
finalise the recovery of the equity provided by Government that we believe was incorrectly deducted,”
ended Cassim.

The Court has indicated that it will assist with expediting the hearing of Part B of our application.

Johannesburg
10 February 2020

Debt Sponsor
Nedbank Corporate and Investment Banking

Date: 10-02-2020 03:40:00
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