(Bloomberg) — South Africa’s state-owned power utility posted a fourth consecutive annual loss as it continued to service a mountain of debt, repaired aging plants and lost electricity revenue because of a drop in demand caused by the coronavirus pandemic. Eskom Holdings SOC Ltd.’s loss narrowed to 18.9 billion rand ($1.31 billion) in the year through March, from 20.8 billion rand a year earlier, Chief Executive Officer Andre De Ruyter said at a televised briefing on Tuesday. After growing unabated for about 15 years, the utility’s gross debt fell 17% to 401.8 billion rand, thanks to a cash injection from the government, but it remains unsustainably high and plans are being made to reorganize it.
Electricity dropped 6.7% because of lockdown restrictions to curb the spread of Covid-19, the company said in a statement.
Eskom’s inability to provide sufficient power to meet the nation’s needs and its reliance on state bailouts to stay afloat have been a major drain on the economy. Its plans to build new capacity have been riven by corruption, cost overruns and government vacillation over what form of energy to use and the role private producers should play.
The government plans to split Eskom into transmission, generation and distribution units to make it easier to manage, while De Ruyter is taking steps to cut costs and stamp out the graft that’s plagued the company for years. He’s also trying to secure cheaper financing from development finance institutions in exchange for reducing the utility’s environmental footprint by increasing the use of renewable energy.
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