South Africa's Eskom extends power cuts, rand hits 6-week low
By Mfuneko Toyana
JOHANNESBURG (Reuters) - South Africa's Eskom imposed a fifth day of power blackouts on homes and businesses on Thursday, helping drive the rand currency to a six-week low as the cash-strapped utility struggles with coal shortages and breakdowns at some of its plants.
Eskom, which supplies more than 90 percent of the country's power, is technically insolvent, the government said on Wednesday, and warned an urgent bailout was needed to help it manage its more than $30 billion of debt.
"Due to a shortage of capacity, Eskom will implement Stage 2 rotational load-shedding from 0800 (0600 GMT) today and this is likely to continue until 2200 (2000 GMT)," Eskom said on Thursday.
This means up to 2,000 megawatts of electricity will be cut from the national power grid. On Monday the firm slashed 4,000 megawatts from the national grid in its largest cut since 2014.
Locally referred to as "load-shedding", the power cuts are an emergency measure to prevent the power system from a total collapse, Eskom says.
Around a third of Eskom's 45,000 MW capacity is offline.
The outages, the worst in several years, expose risks to Africa's most industrialised economy and have spooked investors just days before a national budget, prompting a sharp slide in the rand and government bonds.
The rand fell half a percent versus the dollar to its lowest in six weeks on Thursday and is now down 3 percent in three days.
For ordinary South Africans the cuts mean some mothers are struggling to cook for their children and traffic gridlock in major cities as traffic lights stop working.
Eskom's woes, which reflect the failure of successive governments to take on labour unions, pose a potential threat to South Africa's credit rating, with Moody's the last of the top three ratings agencies to rate it investment grade.
President Cyril Ramaphosa's government has called for the company to be split in three, but the National Union of Mineworkers (NUM) on Thursday warned against splitting it up, telling his African National Congress (ANC) not to take NUC members' votes for granted in a general election set for May.
The NUM is a close ANC ally and its warning comes hours before President Ramaphosa is scheduled to deliver a state of the nation address in parliament.
He is expected to be asked for further details on his plan to split up Eskom, a plan which will not involve privatisation, Public Enterprises Minister Pravin Gordhan said on Wednesday.
Eskom started cutting power on Sunday and intensified outages on Monday after six of its generating units unexpectedly went offline.
(Reporting by Mfuneko Toyana; writing by Emelia Sithole-Matarise; editing by Jason Neely)
First Published: 2019-02-14 09:51:57
Updated 2019-02-14 15:31:16
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