South Africa on Tuesday passed 200 days of blackouts in 2022, with more to come.
Eskom has implemented record rolling blackouts this year because its old and poorly maintained power plants are continually breaking down. The energy shortage has affected investment and affected production.
“Fluctuations in electricity supply have profound implications for the economy and could be seen as the biggest risk to South Africa’s growth and future,” Sygnia chief executive Magda Wierzycka said in a Email response to questions.
South Africa’s Reserve Bank said last month that the power cuts mean the economy is likely to grow by only 0.1% in the final quarter. It forecasts economic growth to slow to 1.1% in 2023 from 1.8% this year and assumes that increased electricity rationing will reduce output by 0.6 percentage points.
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André de Ruyter’s resignation as Eskom’s CEO offers South Africa an opportunity to bring in a qualified and experienced CEO who has the necessary political support, Wierzycka said. “It won’t be easy to find someone suitable, but the government cannot afford to get it wrong again.”
Eskom supplies most of the country’s electricity and does not generate enough revenue to cover its operating costs and interest bill, leaving it dependent on state bailouts to survive.
Its outgoing CEO warned on Friday that the outlook for power supply next year will be very limited and that blackouts will continue until an additional 4,000 to 6,000 MW of generation capacity is added to the grid. – With the assistance of Renee Bonorchis and Amogelang Mbatha.
