BusinessEnergy

South African power utility Eskom to start rolling blackouts

Highlights

  • Most of Eskom’s plants are old, have been poorly maintained
  • Outages have been major constraint on economic growth, output

Eskom Holdings SOC Ltd., the state-owned South African utility that provides about 95% of the nation’s power, said it will cut 2,000 megwatts of electricity from the national grid because of a shortage of generation capacity. The rand weakened.

The power cuts are likely to be implemented from 9 a.m. to 11 p.m. local time, Eskom said in a Twitter posting. The utility, which has amassed 450 billion rand ($30 billion) of debt and is reliant on state bailouts to remain solvent, has battled to meet demand for electricity because most of its plants are old and have been poorly maintained.

The power shortages have been a major constraint on production and growth in Africa’s most industrialized economy. The rand declined as much as 1.1% against the dollar and was 0.6% weaker at 14.9851 by 8:37 a.m. in Johannesburg.

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South Africa has experienced intermittent power cuts since late 2005, with the previous round occurring more than six months ago. The government has said it will announce plans to restructure Eskom into three operating units and reorganize its debt by the end of the month.

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