Johannesburg - Three major South African unions have signed two-year wage deals with state power utility Eskom, one of the unions said on Friday, averting potential illegal strikes that could have hit power supply in Africa's most advanced economy.

The Solidarity union, which represents mostly skilled workers, said in a statement the agreement would see annual pay hikes of 8.5 percent over the next two years, above the current inflation rate of 6.6 percent.

The deal was also signed by the National Union of Mineworkers (NUM) and the National Union of Metalworkers of South Africa (NUMSA), Solidarity said.

A source at NUM confirmed the union had agreed to the offer.

NUMSA officials were not immediately available for comment.

Both NUM and NUMSA had said their members might embark on wildcat action against Eskom, where workers are not allowed to strike because their services are deemed to be “essential”.

A strike at Eskom would have further battered investor confidence, after waves of strikes in the platinum and engineering industries this year.

Eskom, which provides virtually all of South Africa's power, is scrambling to build new stations to keep the lights on as demand threatens to outstrip capacity.

The five-month walkout in the platinum industry this year was the longest and costliest strike in South Africa's history and pushed the economy into contraction in the first quarter. - Reuters