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11:29 < Back DOC-20230411-WA0044..pdf READ THE CASE STUDY BELOW AND ANSWER ALL QUESTIONS THAT FOLLOW Eskom wants South Africa to take over 50% of debt: report 14 November 2021 South Africa's state-owned power utility wants the govemment to take over about half of its debt so it can accept support pledged by ri&l nations to help reduce dependence on coal and cut emissions, City Press reported. Eskom Holdings SOC Ltd is set to be the biggest beneficiary of 58.5 billion in loans and grants pledged to South Africa by nations including the US and UK at the COP26 climate talks. Its total debt stood at R402 billion ($26 billbn) at the end of March. 'It makes no sense to add more debt to the current R400 billion,' Johannesburg-based City Press quoted Eskom chief financial officer Calib Cassim as saying. Govemment must take over R200 billion of it. It's just like in one's personal finances, where one has to make substantial progress with the payment of one mortgage before taking out another one, otherwise you are risk of defaulting,' he said. Eskom hasn't made progress in talks, spanning two years, with department of public enterprises and National Treasury about taking over some of its debt, City Press reported, citing Cassim. The National Treasury didn't make additional provisions for Eskom in the medium-term budget policy statement on Thursday. Finance minister Enoch Godongwana suggested that the utility sell some of its coal-fired power stations to put it in a better position to finance its planned shift to cleaner energy. Key government ministers agree on the plan, which would also help reduce Eskom's debt burden, he said. Source: Available at: httpsJ/businesstech.co.za/news/enerqy/537432/eskom-wants-south-africa-to-take-over-50-of-debt- Question 1 [30 MARKS] 1.1 According to the case study, Eskom wants to 'shift to cleaner energy. Identify the type of market failure linked to the above staternent. 1.2 Analyse three possible economic solutions to address the type of market failure that Eskom currently faces. Ensure that your analysis clearly shows exactly how each of these solutions would work in practice and mention their possible downsides. (15) 1.3 According to the case study Eskom owes R402 billbn in debt. As a policymaker, discuss two economic arguments in favour of changing Eskom's current organisational structure. (10) 1.4 Briefly explain the possible economic impact of govemment agreeing to absorb ESKOM's debt as described in the case study.