Investors considering backing projects in South Africa should take the likelihood of power outages into account, Trade and Industry Minister Rob Davies said from Davos, Switzerland, yesterday.
"Investors have recognised that there is an energy 'challenge' in South Africa," Davies said in an interview before the start of the World Economic Forum. "That is something they need to factor in to their [assessments] of risk and reward."
Davies is one of a host of South African ministers attending the gathering. President Jacob Zuma is leading the contingent and is being billed as one of the more important world leaders attending this year.
By his side will be Ministers in the Presidency Jeff Radebe and Susan Shabangu, Finance Minister Nhlanhla Nene, Mineral Resources Minister Ngoako Ramatlhodi, Health Minister Aaron Motsoaledi and Water Affairs Minister Nomvula Mokonyane.
Eskom chairman Zola Tsotsi and other executives of the embattled power utility withdrew from the forum this week following media reports about the high cost of their attendance.
Eskom recommenced power cuts last week and warned that planned outages would occur almost daily until April as it struggles to meet demand.
Bank of America Merrill Lynch said three months of continuous power cuts could shave as much as a percentage point off the economic growth rate.
The government is looking for short-term measures to help ease the shortages and is reviewing Eskom's maintenance plan to try to ensure that there are no unplanned outages, Davies said.
The construction of two coal-fired power plants is about two years behind schedule. And Eskom is struggling to fill a R225-billion cash-flow gap.
Manufacturers are "relatively comfortable" with the rand after it weakened 6.5% to the dollar in the past year, Davies said. The currency was trading around R11.60 to the dollar yesterday afternoon.
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