The last few months have been unkind to Eskom, the company that, at least until the end of July, remains Botswana's power supplier until the thermal plant at Moropule B gets up to full capacity. First, in March NERSA, the South African Energy regulator, put a lid on the requested 16% power price increase by Eskom. It only agreed to an eight percent increase. The South African consumer breathed a sigh of relief from what had been years of double digit cost increases. For the past six years, South African energy users were confronted by average power-price increases of 25% to help fund Eskom's R500 billion spending through 2017 to overcome an electricity shortage.
For Eskom, this was a major blow to its expansion plans which required the continuation of double digit price increases in order to assure that it had sufficient revenue not to expand the South African national debt. At present, Eskom is approximately R195 million in debt and the NERSA announcement can only mean that if South Africa wishes to avoid continuing power shortages which have constrained economic growth, it will have to allow and underwrite more of Eskom's debt.The price increases in South Africa have been softened in Botswana by the government's substantial subsidies to power generation.
