Eskom, the state-owned company that provides 90% of South Africa’s electricity, fueled the expansion of gold mining before bringing light to the despised of apartheid. Collapsed by corruption and debts, the giant today handicaps the first industrial power of the continent.
For months, 60 million South Africans have been without power for up to 12 hours a day. The country declared a state of national disaster in February: the coal-fired power stations are dilapidated, breakdowns are frequent and the coffers are empty. But the origin of the crisis goes back several decades.
Eskom “represents a source of enormous frustration and ridicule” in the country, summarizes Kyle Cowan, author of Sabotage, a book detailing the throes of the century-old company. However, it is proud of its history, which is closely linked to that of modern South Africa. Its website recalls that “the good people of Kimberley,” a diamond mining hotspot, were among the first in the world to install electric lights in 1882, “beating even London.”
Gold had been found where Johannesburg was going, the mines needed power. With coal present in abundance, power plants were built, taken over by Eskom from the 1940s.
An ignored alert
But one thing had not been anticipated: the end of white domination. In 1987, only 40% of South Africans, almost all white, had access to electricity. Racial segregation also excludes blacks from access to electricity.
Democratic elections in 1994, which made former convict Nelson Mandela president, were followed by an ambitious campaign to electrify millions of homes and keep prices low. But the company would later acknowledge that during those years “very little” parallel was done to increase production capacity, which laid the foundation for the current problems.
Most power plants today are over 45 years old and fail frequently. “Eskom was mismanaged until the collapse,” Cowan points out. For Finance Minister Enoch Godongwana, recently interviewed by AFP, the most worrying is “the debt, which makes it difficult to move forward quickly, especially to modernize the power stations”.
In 1998, a government white paper sounded the alarm: given the increase in demand, the country will run out of electricity within ten years if new power plants are not built. President Thabo Mbeki ignores it. He will later apologize. Eskom only launched the construction of two new power plants in 2007, the year of the first load shedding.
A cancer that would have “metastasized”
Design problems and delays in construction, these projects lead to monstrous cost overruns, accompanied by suspicions of corruption. Under the presidency of Jacob Zuma (2009-2018), marked by an unprecedented level of corruption, Eskom became one of the main targets of the organized looting of state resources.
Millions of euros are misappropriated, in particular through public contracts awarded to companies in exchange for bribes. Eskom today has a debt of nearly 21 billion euros, which the government is trying to pay off. In 2022, a former CEO was arrested for money laundering and fraud. Eskom has known more than ten CEOs in fifteen years.
In late February, Eskom’s outgoing CEO, André de Ruyter, compared corruption within the state-owned company to a cancer that had “metastasized”, explicitly accusing the ruling ANC of profiting from it. Damning example among many others, the purchase of knee pads for the workers cleaning the ducts: at 15 euros in the trade, a buyer from Eskom ordered a number of them at 4,000 euros each.
Sanitation attempts were met with fierce internal resistance, he said in the shock interview, also recounting how he survived an attempted cyanide poisoning slipped into his coffee. “Corruption is not the root of the energy crisis, but it is one of the main reasons it is unresolved,” says economist Roula Inglesi-Lotz in Pretoria.
Organized mafia cartels
Eskom, which employs 30,000 people, has blamed some of its problems on sabotage, the theft of coal and parts by organized mafia cartels, as well as bad debtors including some cities, which do not pay their bills.
South Africa still gets 80% of its electricity from coal. Lagging behind in a transition to clean energy, the government, backed by powerful unions, retains a protectionist stance towards the coal industry, which employs nearly 100,000 people.
It was not until 2022 that certain barriers were lifted to allow private electricity generation projects. President Cyril Ramaphosa has promised to appoint an electricity minister. But it will be a long time before power outages become history. “There is no magic bullet,” notes Ms. Inglesi-Lotz.