(1) All transactions entered into by the Public Investment Corporation (PIC) has to adhere to the mandate requirements of its clients. The money market mandate of the Government Employees Pension Fund (GEPF) allows for investments up to a 12 month tenure, whereas the capital market mandate allows for investments for a longer tenure. Both of the mandates for these asset classes explicitly state the credit rating of the issuer and/or the instrument being the main criteria for such investment. The Eskom loan in question was done on the explicit condition that the loan should be government guaranteed , which implies that it has the highest credit quality in the domestic ZAR denominated market.
(2) The GEPF’s mandate requirements for money market and capital market transactions are in line with acceptable industry norms and standards. The GEPF’s mandate was approved by the GEPF’s Board of Trustees. The mandates of all the clients of the PIC are also approved by the Financial Sector Conduct Authority (FSCA).
(3) The PIC’s Research and Project Development Team has conducted detailed research (“deep dive”) into Eskom.
(4) Due to the confidentiality of the information pertaining to the Eskom loan of R5 billion, the supporting documents cannot be made available. It should, however, be stated that this loan was granted on 1 February 2018 and repaid in full, with interest, on 1 March 2018.