S.Africa to expect 3 years of unplanned power outages: Treasury - CNBC Africa

S.Africa to expect 3 years of unplanned power outages: Treasury

Southern Africa

by Reuters 0

South Africans must brace themselves for three years of power disruptions which could further dent already sluggish economic growth.

Treasury said on Wednesday in a budget review document.

State-run power utility Eskom, which faces a cash crunch as it races to build the stations needed to keep the lights on, will get the first of three tranches of a 23 billion rand (2 billion US dollars) capital injection from the government by June, Finance Minister Nhlanhla Nene said.

This money would be raised through the sale of non-strategic state assets, such as property and share holdings in listed firms, and surplus cash balances in public entities, the Treasury has said previously.

Nene, presenting his annual budget to parliament, said Eskom faced a 200 billion rand funding gap up to 2017 and the utility would apply to the energy regulator this year for permission to raise the rates it charges consumers to help cover its growing costs.

Weary South Africans are already being subjected to frequent controlled power cuts which Eskom implements to prevent the national grid from being overwhelmed to the point of collapse.

Economic growth for 2015 could halve to 1 per cent from a projected 2 per cent, already revised down from an October forecast of 2.5 per cent, should power constraints worsen, the Treasury said in the budget review document that accompanied Nene's speech.

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