South Africa’s indebted state-owned power utility’s costs to run its diesel-powered units more than doubled as its fleet of coal-fired plants experienced frequent breakdowns.
(Bloomberg) — South Africa’s indebted state-owned power utility’s costs to run its diesel-powered units more than doubled as its fleet of coal-fired plants experienced frequent breakdowns.
Eskom Holdings SOC Ltd. paid 21.4 billion rand ($1.1 billion) in the 12 months through March 2023, compared with 10 billion rand a year before to operate the open-cycle gas turbines intended to run during peak-demand periods, National Treasury said in a presentation to lawmakers. The difference in the amount was partly due to higher-than-budgeted volumes and higher prices, it said.
The performance of Eskom’s fleet of mostly coal-fired stations has deteriorated, resulting in record blackouts that the central bank estimates will shave 2 percentage points off economic growth this year. The government had declared it a national crisis and implemented unprecedented measures with few results. The rand has slumped almost 14% against the dollar this year, in part because of the crisis.
Read more: South Africa’s Rand Hits Fresh Record Low as Risks Stack Up
Eskom’s energy availability factor, a measure of usable capacity, dropped to 56% during the financial year, mainly due to unplanned outages. That was down from 62% the previous year, the presentation showed. The utility’s finances are also in a worse state, with the loss before tax almost doubling to 21.2 billion rand from 11.9 billion rand a year earlier.
Gross debt securities and borrowings rose 11% to 439 billion rand in the year through March.
The yield on Eskom’s 2028 eurobonds, which don’t carry a government guarantee, fell 10 basis points to 10.62% by 4:31 p.m. in Johannesburg. The yield on South Africa’s generic 10-year notes was up 15 basis points to 12.5%.
–With assistance from Colleen Goko.
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