South Africa’s biggest labour group is proposing that more than half the debt of state-owned Eskom be put into a special purpose vehicle to help save the utility and avoid job cuts.

The Congress of South African Trade Unions urged the government strike a deal with the Public Investment Corp., Africa’s biggest money manager, to help cut Eskom’s debt to R200 billion from R450 billion, according to a document dated November 10-11 and seen by Bloomberg News. Development finance institutions should also be involved, the group said.

The debt restructuring would help diffuse a crisis that “threatens not only to implode the state but also the economy,” Cosatu said. “Not only are the jobs of workers at Eskom at risk, but in fact all workers in the event of Eskom collapsing.”

South Africa is under intense pressure to come up with a workable turnaround plan for Eskom, which is struggling to service debt and was forced into a fresh round of managed power cuts this month. Yet passing debt to the PIC would come with its own risks, as the company is the main manager of government-worker pension funds.

Cosatu and other union federations, government departments and the National Treasury have been in talks with Eskom’s creditors, said Matthew Parks, Cosatu’s parliamentary co-ordinator. The group’s meeting with them “went very well” and are ongoing, he said.

Eskom’s turnaround plan must also include public and private investments “to produce renewable-energy technology locally,” especially in Mpumalanga, Limpopo and Eastern Cape provinces where the coal is mined and used in power stations, Cosatu’s proposal said. Many of the utility’s coal stations are close to being decommissioned.

Those responsible for mismanaging Eskom should be fired and anyone found to have stolen funds from the utility be arrested, Cosatu said. The company should assess the workforce and reskill employees where necessary, the group added, provided no staff lose their jobs.

© 2019 Bloomberg L.P.