Precarious financial situation – CEB: bank overdrafts of Rs 7 billion

There are serious concerns about the financial health of the Central Electricity Board. While it once had reserves amounting to billions of rupees, the organization is now forced to resort to bank overdrafts to meet its needs.

Since the financial year 2021-2022, the Central Electricity Board (CEB) has been sailing in the red, with a deficit of Rs 32,923,307, followed by a deficit of Rs 4,196,728,028 for the financial year 2022-2023. Faced with this situation, the organization is forced to resort to bank overdrafts.

The organization's current bank overdraft amounts to Rs 7 billion. According to sources close to management, the CEB has been facing an overwhelming financial situation since the last two confinements in 2020 and 2021. These confinements led to the cessation of usual economic activities, thus depriving the organization of income.

The CEB management emphasizes that it is also necessary to take into account the 2021/2022 financial year, during which the CEB crossed a new threshold. He spent Rs 7,351,047,556 on coal-generated power. If we consider the last two financial years, as much as Rs 12 billion was spent on coal. The organization's management justifies these significant expenses by highlighting the war in Ukraine and the repercussions of the covid-19 pandemic. The price of coal increased from USD 77.90/tonne to USD 241.83/tonne. Addressing the energy situation in Rodrigues, the CEB indicates that 94% of the energy produced on the island comes from fossil sources. This situation is hardly favorable to the organization's business.

Despite this deficit situation, the investments made by the CEB, the increase in prices in 2023 and the increase for the industrial sector in 2024 could help the company get its head above water.

The financial situation of the CEB was prosperous in the past. It was among the few government agencies that made profits in the billions. Indeed, the figures testify to this prosperity: the CEB had Rs 10,857,379,176 in 2015, Rs 16,602,746,877 in 2016, Rs 19,622,369,435 in 2017, Rs 19,472,625,154 in 2018 and finally Rs 20,600 380,639 in 2019/2020. The Rs 3 billion which were drawn from the CEB's reserves to be injected into the National Consolidated Fund continue to weigh heavily on the financial situation of the organization.

For Patrick Assirvaden, president of the Labor Party and responsible for the energy file, the CEB was once a company which had surpluses of Rs 13 billion. “Today, the CEB is forced to resort to bank overdrafts, due to the fault of Pravind Jugnauth and Joe Lesjongard who helped to squander these reserves. The CEB is today in a critical situation. Because it constantly needs money to pay the Independent Power Producers, pay employees, carry out maintenance and pay its suppliers. Without a bank overdraft, the CEB would not be able to ensure its development, maintenance or achieve the energy transition. It’s a real disaster,” he laments.