Nersa grants Eskom 12,7% power price hike
The increase could put upward pressure on inflation.
JOHANNESBURG - Power utility Eskom will be able to raise prices by 12,7 percent for the 2015-16 financial year, compared to the 8 percent it was previously granted, the energy regulator said on Friday.
The increase, which will help shore up Eskom's shaky finances, could put upward pressure on inflation in Africa's most advanced economy and add to already escalating costs for power-intensive industries such as mining.
The government recently approved a support package for Eskom, allowing the utility to raise more debt and receive a capital injection from the state.
Eskom, which provides virtually all of South Africa's electricity, faces a liquidity crunch as costs run ahead of revenues.
It also faces a power squeeze, racing to build new plants to keep ahead of demand.
In March, the utility was forced to impose rolling blackouts for the first time in six years to prevent the national grid from collapsing, underscoring the precarious balance between power supply and demand.
National Treasury estimates electricity shortages have cost the economy about half a percentage point of growth a year, with the figure possibly higher in 2014.