Parliament green lights urgent debate on SA energy crisis
National Assembly Speaker Baleka Mbete said she agrees this latest bout of load shedding by Eskom, especially its impact on the economy, is a serious matter.
CAPE TOWN - Parliament will schedule an urgent debate on the current energy crisis.
National Assembly Speaker Baleka Mbete on Wednesday said she heeded a request from the Democratic Alliance’s Natasha Mazzone to schedule the debate as a matter of national importance.
Mbete said she agrees this latest bout of load shedding by Eskom, especially its impact on the economy, is a serious matter that warrants the National Assembly's attention.
Parliament’s programme committee, which determines the programme of the house, is scheduled to meet on Thursday morning and will decide on a date for the debate.
Eskom needs a cash injection by April to survive, the Public Enterprises Department warned on Wednesday as the struggling state-owned firm cut electricity for a fourth straight day.
Eskom, which supplies more than 90% of the country's power, is battling a shortage of capacity that threatens to derail government plans to lift the sluggish economy.
President Cyril Ramaphosa said last week that the government would support Eskom’s balance sheet but said details would be announced in a budget speech by the finance minister on 20 February.
The Department of Public Enterprises, which oversees Eskom, said in a presentation to Parliament that Eskom was technically insolvent and would “cease to exist” at the current trajectory by April, unless it gets the bailout. The minister, Pravin Gordhan, however, ruled out privatisation of the utility.
The yield on the benchmark government bond, which moves inversely to its price, was up 8.5 basis points as investors fretted about the economic impact of a crisis which could see South Africa lose its remaining investment grade credit rating.
“With Eskom in the midst of trying to find a solution to its financing needs, investors are more nervous as to what this means to (rating agency) Moody’s,” Citi economist Gina Schoeman said in a note.
“Markets are highly sensitive to even a negative outlook decision because of how close this places South Africa to a WGBI-exit and inevitable ZAR depreciation and increased vulnerabilities,” she added, referring to the World Government Bond Index (WGBI).
Moody’s, the only one of the “big three” agencies to rate South Africa at investment grade, is scheduled to review the sovereign on 29 March.
South Africa is rated “junk” by S&P Global Ratings and Fitch and if Moody’s joins them, the country will be booted out of the WGBI which may prompt investors to dump its assets.
Check your area's load shedding schedule here.
The Public Enterprises Department said Eskom was struggling to keep its mainly coal-fired plants running due to coal shortages and poor maintenance, with 40% of breakdowns a result of human error.
The cash-strapped company said it would cut 3,000 megawatts (MW) of power from the national grid from 0600 GMT on Wednesday, likely until 2100 GMT. This follows a similar cut on Tuesday and 4,000 MW on Monday in the worst power cuts seen in several years that drove the rand currency down on Monday.
The power cuts have led to frustration among ordinary South Africans with traffic gridlock in major cities during rush hours as traffic lights stop working and some mothers struggling to feed their children.
“I have a baby, so making her bottles was a challenge because I had nowhere to boil water, which resulted in me having to go to a restaurant that has a generator just to get boiling water,” 28-year old Anazi Zote, mother of a 10 month-old daughter, told Reuters.
Business owners with no access to backup power sources have also been hit and switched-off air conditioners have left office workers sweating in the summer heat.
“From work to home to everywhere. At the moment the lights are off and we are using the stairs because the elevator isn’t working, and I’m on the 11th floor … it’s frustrating,” Leroy Erasmus, 25, a risk and surveying consultant, told Reuters.
Some firms in the mining sector, the backbone of the country’s economy, are looking at alternatives to reduce their dependence on Eskom.
Harmony Gold said on Tuesday that it was in talks to build a 30 MW solar plant to supply power to some of its assets, in an effort to cut its electricity costs and dependence on Eskom.
Gordhan said the government was worried about the impact the power outages could have on the economy.
“The Eskom board is taking steps to ensure that load shedding (power cuts) doesn’t become a permanent feature of South Africa this year,” he said.
Additional reporting by Reuters.
(Edited by Shimoney Regter)