In short, Eskom is not generating sufficient cash to meet its operating costs and service debts, and thus, it has been borrowing to make principal and interest payments on its loans. The financial challenges are the result of unsustainable operating costs, costs by expensive coal contracts, and overall operating inefficiencies. The escalating debt servicing costs for debt in excess of R400 billion will peak at almost R400 billion after the completion of Medupi and Kusile. Essentially, what it means is that the contracting model used for the construction of Medupi and Kusile did not achieve the objective of maximising local content in the build programme. Instead, it enabled looting and corruption.