South Africa

Eskom a concern over diesel expenditure

Eskom Holdings has spent nearly R7.7 billion over the past six months burning diesel in efforts to ease rolling blackouts.

That amount is already above what the state-owned company had estimated it would spend for the full year, Fin24 reports, citing Eskom’s Chief Operating Officer Jan Oberholzer.

Oberholzer was speaking at a briefing on Monday to address the state of the system after breakdowns at several power producing stations. Eskom uses diesel-fueled turbine units when unplanned outages are too high or to help meet demand during peak hours.

Oberholzer said he had engaged with chief financial officer Calib Cassim on the issue, which is a serious concern for the power utility, according to online news outlet Fin24.

Eskom is still finalizing its February year-end forecast but is way over what it estimated, with about R350 million left over from the original budget, Fin24 said.

According to Bloomberg calculations, South Africa has experienced 99 days of power cuts so far this year. It has suffered record outages with Eskom increasing rolling blackouts to 6,000 megawatts being taken from the national grid four times.

In 2019, Eskom received a multibillion-dollar state bailout, which resulted in the government increasing the amount of debt it sold at weekly auctions, driving up yields.

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