South Africa is being hit by the worst power outages in more than two years. The state electricity company contends with multiple plant breakdowns after illegal protests followed by a deadlock in wage negotiations.
Eskom Holdings SOC Ltd., which generates the vast majority of the nation’s power, will implement 6,000 megawatts of cuts for six hours from 4 p.m. on Tuesday and again on Wednesday to prevent a complete shutdown of the grid. That’s sufficient energy to supply almost 4 million South African homes as reported by Bloomberg.
The outage was caused by “unlawful and unprotected labour action, which has caused widespread disruption to Eskom’s power plants,” the company said in a statement.
The rand weakened 1.1% to 16.034 a dollar at 3:34 p.m. in Johannesburg. The last time rationing was so severe was in December 2019, when mining and manufacturing output were curtailed.
The utility has a total capacity of about 45,000 megawatts. Eskom’s credit risk soared, with the yield premium of its 2028 dollar bonds over similar-maturity US treasuries widening to 847 basis points, the most since Nov. 2020.
The move is a further headache for Eskom Chief Executive Officer Andre de Ruyter, who has been in his post for more than two years and yet has overseen a series of missed targets to improve the utility’s operational performance.
The country experienced record outages in 2021, despite renewed stability to management after several changes over the past decade. There have been 60 days of blackouts this year.
Read also; Relief as South Africa Drops All COVID-19 Restrictions.
