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South Africa Needs to Invest to Build Confidence in Power Sector – Minister

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South Africa needs to invest more to rebuild confidence in its ability to supply power, its energy minister said on Tuesday, after its state-run power firm was forced to implement some of the worst blackouts in years.

Problems at cash-strapped national power firm Eskom have shaken belief in South Africa’s ability to power the continent’s most industrialised economy, and hit business including in key sectors like mining.

“We have to instil confidence in our ability to provide reliable power,” Energy Minister Jeff Radebe said at a conference in Johannesburg, adding President Cyril Ramaphosa’s efforts to entice investment could otherwise be undermined.

“Deteriorating Eskom plant performance driven by old generation infrastructure confirms that we are now in need of more investment in new generation capacity,” he said.

Years of mismanagement and governance problems at Eskom have left the company, which supplies 90 percent of South Africa’s power, saddled with debt and ailing power plants, a situation Radebe described as “untenable”.

Ramaphosa has been at pains to restore troubled state firms, which weigh on confidence in government finances and the economy, to financial health, but the extent of their difficulties means progress has been slow.
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