Brace Yourself for More Power Cuts

About 95% of South Africa’s power is generated by Eskom and it has warned that we need to brace ourselves for more frequent power cuts as it stops the rescheduling of planned maintenance. This also means that the rand took a hit and weakened. 

Andre de Ruyter, who at the beginning of the year took over as Eskom’s chief executive officer said that we need to, unfortunately, expect an increase in load shedding as we need to give ourselves the space to fix what needs to be fixed. 

Since late 2005, South Africa has been facing an energy deficit due to the ageing plants, the failure to keep pace with demand and the government stalling on giving the go ahead to invest in new capacity. 

The finances of Eskom are also in dire straits with over R450 billion of debt and it isn’t able to generate enough income to cover its costs, which has left it reliant on bailouts. As it refinances debt the utility expects a rise in interest costs.

According to the Council of Scientific and Industrial Research, power cuts reached 6000 megawatts late last year and last year alone may have trimmed about R118 billion from the GDP.

After, De Ruyter issued his warning about more outages, the rand continued its decline.

Article Source: https://www.moneyweb.co.za/news/companies-and-deals/eskom-warns-sa-to-brace-for-more-frequent-power-cuts/