Eskom starts biggest power cuts since March

JOHANNESBURG (Reuters) – South Africa's Eskom [ESCJ.UL] on Friday imposed its biggest power cuts since March, as the ailing state utility struggles to avoid a system collapse.

For the second time this year, Eskom said it would need to reduce demand by 4,000 megawatts, or around 10 percent of the power capacity of Africa's most advanced economy.

"We don't want to get beyond this stage," an Eskom spokesman told Reuters.

While investors have largely taken the power cuts in their stride this year, the rand currency weakened to more than a 3-week low of 11.30 against the dollar in afternoon trade.

Eskom's inability to meet demand in December, when electricity usage usually dips, underscores the precarious state of South Africa's power supply due to years of underfunding.

The utility, which supplies virtually all of South Africa's power, said last month the government's promised 20 billion rand ($1.8 billion) cash injection wouldn't be enough to ease funding constraints and help it avoid a credit downgrade.

Eskom has been scrambling to build new power stations to ease razor-thin supply margins, but has been beset by a two year delay at its massive planned Medupi plant.

An extended series of rolling power outages in 2008 caused misery for millions and cost the country billions of dollars in lost output.