South Africa urgently seeks cash for Eskom to buy diesel

South Africa urgently seeks cash for Eskom to buy diesel

South Africa’s government said it’s urgently seeking funds to buy diesel needed to fuel auxiliary power plants after the state electricity utility said outages will intensify this week.

Public Enterprises Minister Pravin Gordhan met members of Eskom’s board on Sunday amid “serious concerns” about the risk of increased nationwide blackouts in the months ahead, his department, which oversees the utility, said in a statement.

The cuts are expected to deepen this week.

The Department of Public Enterprises “is urgently working with National Treasury and Eskom for it to find the money to buy supplies of diesel,” it said Sunday.

The government is also “looking for savings” within Eskom’s existing funds.

South Africa has been subjected to record power outages this year, mainly due to breakdowns at Eskom’s old coal-fired plants that make up the backbone of its generation capacity. The utility has been forced to run turbines that run on diesel — intended for use during peak-demand periods — to mitigate blackouts that have curbed economic growth.

The loss-making, indebted company has already spent more than R11 billion on the fuel in the 10 months to October, Chief Operating Officer Jan Oberholzer said last week. Load shedding may get worse if funds to buy the fuel run out, he warned.

The utility is in talks with the government, specifically the DPE, Eskom said in a reply to questions. The group declined to provide any detail on its diesel stocks.

President Cyril Ramaphosa’s government has announced measures to tackle the energy crisis, but those efforts haven’t bolstered security of supply, despite commitments made by officials.

Gordhan in September said electricity shortages would not decline to previous levels.

Eskom has this year implemented more than double the outages of 2021, according to the Council for Scientific and Industrial Research. The current scheduled cuts reach Stage 4 – the equivalent of removing 4 000 megawatts from the grid – though the overall situation is erratic and subject to change, Eskom said Monday.

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