Eskom CEO, André de Ruyter.
Image: Sumaya Hisham/Reuters
Eskom needs debt relief combined with rate increases to survive, said outgoing chief executive André de Ruyter, who has run the utility for three years as power outages in South Africa intensified.
The continent’s most industrialized nation has had 100 straight days of power outages due to supply shortages caused largely by unreliable coal-fired power plants. Solving the energy crisis that is crippling the economy has become a central focus for the government of President Cyril Ramaphosa.
Financial constraints at Eskom, which is in debt of R396 billion, combined with breakdowns, theft and sabotage at its plants, have caused the utility to impose blackouts for about 15 years, but the blackouts have gotten progressively worse in the past five months with the Ramaphosa administration struggling to find a way out of the crisis.
The blackouts, known locally as load shedding, are costing the South African economy up to R899 million a day, according to the central bank.
“We need rates that reflect costs,” De Ruyter said in an interview with Bloomberg TV. “If debt relief isn’t backed by rate increases, we’ll be back at the National Treasury with a handout bowl in five years.”
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