HARMONY: 2,802 +52 (+1.89%)
South Africa's Eskom suspends power cuts but warns system vulnerable
(Adds detail, context)
JOHANNESBURG, Feb 15 (Reuters) - South Africa's struggling
state power firm Eskom suspended electricity cuts on Friday but
said the power system remained vulnerable, after five days of
rolling outages which weakened the rand and hurt businesses
across the country.
Eskom supplies over 90 percent of the power in Africa's most
industrialised economy but has been grappling with power station
breakdowns and diesel shortages which have curbed its ability to
run backup power sources.
President Cyril Ramaphosa, who faces a parliamentary
election in May, has pledged to reform the utility by splitting
it up and providing financial support but has ruled out
The rand was on course for a loss of more than 3
percent against the dollar this week, largely because of Eskom's
woes, which risk derailing a sluggish economic recovery.
"Due to further improvement in generation performance and
the notable strides made in replenishing water and diesel
reserves, Eskom is not likely to implement load-shedding on
Friday," Eskom said in a statement, using a local term for power
Eskom started the power cuts on Sunday and intensified them
to 4,000 megawatts (MW) of cuts on Monday in the worst outages
South Africa has seen since 2014/15. The power cuts had been
reduced to 2,000 MW by Thursday.
The power crisis has caused traffic gridlock in major cities
as traffic lights stop working and frustration for ordinary
Businesses like miner Harmony Gold are exploring
strategies to reduce their dependence on Eskom.
The government has promised more details about how it will
support Eskom's balance sheet on Feb. 20, when the finance
minister will deliver a budget speech in parliament. One of
Eskom's major issues is its unsustainable debt mountain of
around 419 billion rand ($30 billion).
($1 = 14.1358 rand)
(Reporting by Alexander Winning
Editing by Sherry Jacob-Phillips)
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