Eskom asks for R19.5-billion diesel bailout

South Africa’s cash-strapped power utility Eskom Holdings SOC Ltd. has asked the National Treasury for 19.5 billion rand ($1.1 billion) to buy diesel to fuel auxiliary power plants, a request that’s unlikely to be heeded, said Finance Minister Enoch Godongwana.

“We don’t have it,” Godongwana said in an interview at Bloomberg’s office in Johannesburg.

Africa’s most-industrialized economy has been subjected to record power outages this year, mainly due to breakdowns at Eskom’s poorly maintained coal-fired plants that account for over 80% of South Africa’s power supply.

The utility has been forced to use turbines that run on diesel, intended for bolster generation during peak-demand periods, to mitigate blackouts that have curbed economic growth.

Eskom has spent 11 billion rand on the fuel in the 10 months through October and warned last month that electricity outages, known locally as load-shedding, may intensify if it runs out of funds to buy the fuel.

The state-owned company has imposed 176 days of rolling blackouts so far in 2022, according to Bloomberg calculations.

The utility has since negotiated a deal with state oil company PetroSA for diesel, which should be sufficient to cover its requirements for the fuel through the financial year ending March 2023, Godongwana said.

Still, the state utility says it’s using the fuel sparingly.

“Due to the depletion of the budget to acquire diesel for the open cycle gas turbines, Eskom has been forced to strictly conserve the fuel for the direst of emergencies,” it said in a statement Friday, as it announced the resumption of power cuts.

It warned the power cuts may “significantly increase” in the next six to 12 months as planned maintenance and breakdowns reduce generation capacity.

Now read: Eskom increases power cuts as six generating units break down

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Eskom asks for R19.5-billion diesel bailout