Davies warns prospective investors

Trade Minister Rob Davies.

Trade Minister Rob Davies.

Published Jan 21, 2015

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Johannesburg- Investors seeking projects in South Africa need to take account of power shortages that might result in more planned outages, Trade Minister Rob Davies said. “Investors have recognised that there is an energy challenge,” Davies said yesterday in Davos, Switzerland, before the start of the World Economic Forum. “That is something that they need to factor in to their factors of risk and reward.” Eskom implemented rolling blackouts across cities on January 9 and warned of almost daily managed outages until April as it struggles to meet demand. Bank of America Merrill Lynch estimates that three months of continuous power cuts could shave as much as 1 percentage point off the economic growth rate. The government is seeking short-term measures to help ease the shortages and is reviewing Eskom’s maintenance plan to ensure there’s no unplanned outages, Davies said. Manufacturers are “relatively comfortable” with the rand after it weakened 6.5 percent against the dollar in the past year, Davies said. “It is definitely more competitive than it was before,” he said. “When it was overvalued, we said that was a major competitive disadvantage to South African manufacturers.”

Meanwhile, Namibian power utility NamPower is exporting electricity to Eskom, an official said on Monday. “We are currently exporting up to 200MW of electricity to South Africa,” Werner Graupe, senior manager for energy trading at NamPower, said.

Namibia usually imports roughly 60 percent of its power from neighbouring countries, including Eskom.

Bloomberg and Sapa

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