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Murky politics to hit South Africa power utility plans

Monday, March 30, 2015

Significance

Tsotsi faces a potential no-confidence vote over his handling of the utility's mounting crises which are imperiling power supplies and recently spurred the utility's second 'junk' credit rating. On March 12, Tsotsi had persuaded the board to suspend the utility's top four executives but it now accuses him of acting in bad faith, possibly under pressure from powerful political interests.

Impacts

  • The suspended chief executive's reinstatement is unlikely to improve Eskom's performance given his lack of energy sector experience.
  • Fiscal constraints will keep an expanded nuclear power programme a distant ambition.
  • Governance woes may strengthen US moves on South Africa to increase physical security around its enriched uranium reserves.
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