Eskom stability to boost economic growth - Ngubane | Fin24
 
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Eskom stability to boost economic growth - Ngubane

Mar 17 2016 16:16
Fin24 and Bloomberg

Cape Town - Eskom board chairperson Baldwin Ngubane said the recent stability of the utility's power supply will boost economic growth amongst other things.

“Eskom has certainly turned the corner, and we are extremely proud of the performance of the Group Chief Executive Mr Brian Molefe and his team for extricating South Africa out of the clutches of load shedding, and doing so despite a constrained financial position,” said Ngubane.

“The team has over the past few weeks managed to produce generation capacity that hasn’t been seen since 2014. The synchronisation of the first unit of the Ingula Pumped Storage Scheme ahead of schedule is indicative of the good progress that has been made thus far in the delivery of Eskom’s infrastructure programme.”

Ngubane said a stable power supply will not only boost economic growth but also enable Eskom and the municipalities to electrify the estimated 3.4 million households that are not connected to the national grid. 

However, a prominent industry body which represents 31 of the country’s largest electricity consumers including Sasol and Anglo American Platinum, believed that the improved outlook was less about what the Eskom was doing and more to do with an economic slowdown.

Spokesperson for the Energy Intensive Users Group of South Africa Shaun Nel told Bloomberg that the issue wasn't that Eskom had magically turned around - the issue was that demand had fundamentally collapsed.

A rout in metals prices has hurt mining and lower global demand has curbed manufacturing, which together make up 20% of SA's gross domestic product.

While less demand keeps supply consistent, it exacerbates the financial issues faced by Eskom. The utility’s borrowing costs have increased and the government has buoyed the company with cash injections.

READ MORE: Economic slowdown ends load shedding, not Eskom

eskom  |  brian molefe  |  economy
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