South Africa Back to Blackouts on Shortage of Capacity at Eskom

(Bloomberg) -- Eskom Holdings SOC Ltd., which produces most of South Africa’s power, said on Sunday that controlled blackouts will return because of a shortage of capacity.

The utility is cutting 2,000 megawatts from the grid from 1 p.m. in Johannesburg until 10 p.m., Eskom said in a statement. It’s also replenishing and preserving emergency water and diesel to limit the possibility of further outages in coming days.

Blackouts became familiar in 2008, and again in 2015, when Eskom implemented months of the outages known locally as load shedding. The cuts hamstrung the economy, limiting industrial output and hurting business and consumer confidence.

South Africa Back to Blackouts on Shortage of Capacity at Eskom

In his annual State of the Nation speech, President Cyril Ramaphosa last week vowed to rescue Eskom after it suffered massive losses and piled on debt, saying that a split into generation, distribution and transmission businesses will enable each unit to manage its costs more effectively and make it easier for them to raise funding. Eskom is seen by rating companies as a key risk to Africa’s most-industrialized economy, with blackouts and huge debt a drag on growth prospects.

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