Eskom has warned South Africans to brace for more frequent power cuts as it halts the deferral of planned maintenance. The rand weakened as a result.
“We have to, unfortunately, expect some increase in load shedding,” André de Ruyter, who took over as Eskom’s chief executive officer at the start of this year, told reporters in Johannesburg on Friday. “We will have to give ourselves the space to fix what needs to be fixed.”
South Africa has been contending with an energy deficit since late 2005 because Eskom’s ageing plants have failed to keep pace with demand and the government stalled on giving it the go-ahead to invest in new capacity.
The utility’s finances are also in dire straits — it has amassed more than R450-billion of debt and isn’t generating enough income to cover its costs, leaving it reliant on state bailouts to remain solvent. De Ruyter said the utility expects interest costs to rise as it refinances debt.
Power cuts, which reached a record 6GW late last year, may have shaved as much as R118-billion from GDP last year alone, according to the Council for Scientific and Industrial Research.
The rand extended its decline after De Ruyter’s warning about more outages, dropping as much as 0.6% to R14.85/US$. — Reported by Paul Burkhardt and Mike Cohen, (c) 2020 Bloomberg LP