Finance Minister Enoch Godongwana.
Photo by Gallo Images/Brenton Geach
Cash-strapped South African power company Eskom has asked the National Treasury for 19.5 billion rand to buy diesel to power auxiliary power plants, a request that is unlikely to be met, Finance Minister Enoch said. Godongwana.
“We don’t have it,” Godongwana said in an interview at Bloomberg’s Johannesburg office.
South Africa has seen record power outages this year, mainly due to breakdowns at Eskom’s coal-fired plants, which are in disrepair and account for more than 80% of South Africa’s power supply. The utility has been forced to switch to diesel-powered turbines, intended to boost generation during peak demand periods, to mitigate blackouts that have slowed economic growth.
Eskom has spent R11 billion on fuel in the 10 months to October and warned last month that the loss of cargo may intensify if it runs out of funds to buy the fuel. The state utility has imposed 176 days of rolling blackouts so far in 2022, according to Bloomberg calculations.
The utility has since negotiated a deal with state oil company PetroSA for diesel, which should be enough to cover its fuel needs until the fiscal year ending March 2023, Godongwana said.
Still, the state utility says it’s using the fuel sparingly.
“Due to the depletion of the budget to purchase diesel for the open-cycle gas turbines, Eskom has been forced to strictly conserve fuel for the most serious emergencies,” it said in a statement on Friday, announcing the resumption of power outages. Energy. She warned that power outages may “significantly increase” in the next six to 12 months as planned maintenance and breakdowns reduce generating capacity.
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