08:35 pm
27 October 2016

South Africa’s Zuma Sees Progress on Ending Power Shortages

President Jacob Zuma said that while energy shortages remain a “serious challenge” for South Africa, the opening of the first 794-megawatt unit of Medupi power station shows progress is being made.

“Pressure is being alleviated,” Zuma said Sunday at the official opening of the unit in the nation’s northern Limpopo Province. “There is light at the end of the tunnel.”

The first of six units at the plant will help state-owned utility Eskom Holdings SOC Ltd. address blackouts that have hobbled South Africa’s economy for 99 days this year. Medupi’s budget ballooned to more than 105 billion rand ($7.9 billion) as labor disputes and construction delays mean the project is now due for completion in 2019, seven years behind schedule.

Eskom will have strict project management to ensure future deadlines are met, Acting Chief Executive Officer Brian Molefe told journalists at the Medupi plant.

“There’s no time to waste,” according to Zuma, who said the utility appreciates the need to bring the rest of the station online without further delay. “We must move faster as a country.”

Electricity rationing after years of underinvestment in aging plants has forced mines and factories to scale back production at a time when rising wage demands boost costs and commodity prices plunge. The rand fell to a record low against the dollar last week as Africa’s second-biggest economy shrank an annualized 1.3 percent in the second quarter.

Public Enterprises Minister Lynne Brown warned earlier this year that outages would last for two years. Eskom, which supplies about 95 percent of South Africa’s electricity, is investing 280 billion rand to expand its generation, transmission and distribution capacity and maintain existing equipment.