situation report

Feb 11, 2019 | 18:16 GMT

1 min read

South Africa: Electric Utility Eskom Resumes Load Shedding

What Happened: South African electricity company Eskom has resumed its practice of partially interrupting power supply, a maneuver known as load shedding, for the first time since December 2018, News24 reported Feb. 11. Meanwhile, Moody's Investment Services has cast doubt on South African President Cyril Ramaphosa's decision to split Eskom into three smaller companies, questioning whether that would be sufficient to address the company's mounting debt and economic risks.

Why It Matters: Load shedding, which is typically undertaken when demand for electricity threatens to unbalance a distribution system's ability to supply it, will be a limiter on South Africa's economy, draining a crucial resource from businesses and households. The report by Moody's underscores the government's difficult balancing act as it attempts to tackle Eskom's significant debt while preventing an escalation with the country's powerful unions.

Background: Eskom holds a de facto monopoly in South Africa's electricity market and has long been accused of corrupt activities, such as providing employment to political supporters.

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