Gordhan says tax shedding is set to ease


South Africa’s power outages should ease in the coming days and the country’s electricity supply will continue to improve in the medium term as new investments bolster generation, said Public Enterprises Minister Pravin Gordhan.

“We will suffer from load shedding in South Africa for a while,” Gordhan said in an interview on Bloomberg TV on Thursday, using the local term for controlled blackouts. But “not of the order we’ve seen in the recent past,” he said.

Eskom Holdings, which provides more than 90% of the country’s power supply, cut 6,000 megawatts of power from the national grid this weekend, leaving businesses and homes without electricity for more than four hours at a time.

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The energy shortages date back to 2008, but the problem has become increasingly acute. Power outages hit a record this year as more than half of the utility’s capacity was sometimes taken offline due to outages and maintenance work.

South Africa should have built additional capacity nearly two decades ago and now needs “huge investments” in energy infrastructure, said Gordhan, who oversees Eskom.

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He expects a government initiative to buy more power from private renewable energy producers to stabilize energy supplies in the longer term, and said a “huge investment appetite” remains despite delays in the program.

Other initiatives have been taken to improve Eskom’s performance, including rehiring experienced staff who worked there and increasing the maintenance budget. The utility had numerous CEOs until Andre de Ruyter took over the position in January 2020.

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Eskom’s management has “did their best,” Gordhan said. “I think we need to constantly assess whether the governance and management capacity are in place that would help us cope with the current crisis.”

Eskom implements rolling blackouts when it fails to meet demand to prevent the power grid from completely collapsing, potentially resulting in a prolonged outage. Gordhan said there was “no risk” that that would happen.

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