Proceeds from the sale of government’s 13.91% stake in Vodacom to the Public Investment Corporation (PIC) will be used to finance the R23-billion allocation to Eskom‚ according to a statement on Wednesday.

“This gives expression to the commitment made in the 2015 Budget and the 2014 Medium Term Budget Policy Statement that funding of state-owned companies would be in a deficit neutral manner‚” the statement said.

After considering “a wide range of options…the sale of the Vodacom stake was the most viable option for ensuring that government was able to swiftly realise the proceeds and inject equity into Eskom to bolster the utility while simultaneously ensuring government was still able to deliver on its strategic objectives”.

The statement added that “the PIC’s offer to government was in line with pricing quoted by other institutions when taking into account the large size of the stake”.

An added benefit‚ government said‚ was that it kept “the shares within the broader family of public sector-related institutions”.

Government on Wednesday also committed to “converting to equity the R60-billion subordinated loan that had previously been provided to Eskom” which will “further strengthen the company’s balance sheet”.