Eskom invites bids to plug short-term power gap

South Africa’s struggling state power utility Eskom offered on Monday to buy surplus electricity from existing generating plants, an indication it thinks it will continue to struggle to meet demand on its own in the short term.

Eskom generates more than 90 percent of the power in Africa’s most industrialised economy but has battled with faults at its coal-fired power plants that have dented economic growth in the past year. President Cyril Ramaphosa is trying to reform Eskom but faces a huge challenge restructuring its 450 billion rand ($25 billion) debt mountain and improving its plant performance.

Eskom said in a request for proposals (RFP) published on a government tender website that it was inviting bids from facilities with at least 5 megawatts of spare capacity. The maximum contract period for the power purchase agreement would be 36 months. “Given the short-term objectives of this tender, which is to mitigate against the prevailing constraints on the electricity system, any existing unutilised capacity should be available to be signed up and generated as soon as possible,” the RFP said.

Eskom has previously procured power from companies during times of crisis. Local firms like energy and chemical company Sasol and pulp and paper firm Sappi have generators which they use to supply their own plants and could in theory bid for Eskom’s RFP.

The bid submission deadline is April 30.