It’s deja vu for South Africa as a chronic power deficit plunges large tracts of the country into darkness and casts a pall over the already struggling economy reports Bloomberg.
Eskom, which supplies most of the nation’s electricity, has instituted daily load shedding since 29 November to avert a total collapse of the grid – as it did in 2008 and 2015.
Load shedding is set to persist until March 2019 as the state utility’s new management contends with maintenance backlogs, construction delays and coal shortages.
Eskom is also afflicted by deep structural and financial problems. It’s racked up R 419 billion in debt that it’s battling to service, and it isn’t selling enough power to cover its costs.
While it anticipates a loss of more than R 11.2 billion in the 12 months through March, its ability to fire thousands of surplus workers is constrained by militant unions and a government that’s gearing up to contest elections next year.
The utility, which has depended on state guarantees and bailouts for years to operate and borrow, has warned it may need more help to survive, money President Cyril Ramaphosa’s administration can ill afford. The company will propose the state absorbs R 100 billion of its debt as part of a turnaround plan.