Plan for a new state power company in South Africa takes shape

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South Africa is forging ahead with a plan to create a new state-owned power company by converting three coal-fired plants into gas-burning generators to ease the nation’s energy crisis.

State power utility Eskom Holdings generates most of South Africa’s electricity, and has subjected the country to rolling blackouts since 2008 because its old and poorly maintained facilities can’t keep pace with demand.

South Africa has been struggling to boost generation since 2008. At least five rounds of bids for renewable power projects haven’t added sufficient capacity, while an emergency plan to add electricity is mired in legal wrangles. A new state electricity generation company is yet another attempt to find a solution to the crisis that has hampered economic growth in Africa’s most-industrialized nation.

Opposition parties are also skeptical of the government’s plans, given its poor track record in overseeing state companies.The idea of setting up a new power utility “proves beyond any doubt that President Cyril Ramaphosa’s government is completely out of touch and clueless on what needs to be done to address the electricity crisis,” said Ghaleb Cachalia, the main opposition Democratic Alliance’s shadow minister for public enterprises.

Once the proposal is approved, the government will invite engineering, procurement, construction companies. The cost of converting the plants would be determined at that point, said Maduna Ngubeni, the department’s head of projects.

 

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