(Bloomberg) — Aslina Wines, an independent winemaker located among the rolling vineyards of Stellenbosch, counts a large generator among its most valuable inventory. The company was counting on the machine to stay operational during South Africa’s worst power outage, which affected the country for 332 days last year. The winemaker was lucky. As power outages became more severe, providers without generators “took a big hit,” said Bradwin Persent, Aslina’s operations and logistics coordinator, as did many struggling small businesses across the country. country.

Then, in March, the outages suddenly stopped. Even as the southern hemisphere entered winter, when electric heaters and early sunsets drove up demand, Eskom, the struggling state-owned utility that produces most of South Africa’s energy , managed to keep the lights on.

It has now been seven months since the last power outage in the country. Persent is happy with this sequence, but has no intention of getting rid of the generator. “We are happy,” he said, “but we are not relaxed.”

For years, chronic power outages have paralyzed South Africa. First implemented in 2008, they cost the economy up to 899 million rand ($52 million) a day, according to central bank estimates, and were one of the main reasons for which the ruling African National Congress lost its majority during last June’s elections. Attempts to repair this corruption-ridden public service have failed over the years: a vast privatization plan failed; an effort to increase production capacity dragged on and was never fully realized. And inside power plants, theft and sabotage have become more audacious.

Today, the situation seems to be stabilizing. The effects of recent and long-standing reforms have radically improved employee morale, experts, analysts and officials say, making all the difference in helping Eskom get back on its feet. The decision to delay the decommissioning of three coal-fired power plants also played a significant role.

The move “brought confidence”, said Malekutu Bizzah Motubatse, president of the National Union of Mineworkers in the Highveld region, where most of Eskom’s coal plants are located. “The government managed to listen to us.”

Eskom’s recovery began to attract attention in March, when week after week passed without power cuts. That’s when Dan Marokane took over as CEO of the company. He won early support from unions by calling for repairing broken power plants and revamping the company’s management structure — a break from previous leaders, who focused on the transition from coal.

At the same time, a $14 billion debt relief plan came into effect. Across the country, the proliferation of solar panels, a popular alternative to relying on Eskom, has eased strain on the grid. Coal thefts declined as the price of ore fell. Power plants were allowed to return parts to their original manufacturers for repair, ensuring more reliable operations.

Efforts to crack down on crime have also borne fruit. As former President Jacob Zuma’s government plundered the utility’s bank accounts, sabotage and small-scale thefts increased at power stations. Contractors were known to repeatedly steal and resell parts, and thieves would replace entire truckloads of coal with stones. Yet between April and August this year, a joint effort by the police, the national prosecutor’s office, the tax service and a special investigation unit reduced crime by 28% compared to the same time of year previous.

Efforts by law enforcement and the courts have produced “phenomenal” results, said Lumkile Mondi, an economist at the University of the Witwatersrand who has written extensively on Eskom.

Fragile recovery

It has been a long time since Eskom employees had any reason to be optimistic. Not only was the company publicly vilified every time the lights went out, but workers were also expected to work in near-impossible circumstances. Stations carrying out major repairs had parts stuck in convoluted processes, performance-related bonuses were suspended for years, and corruption-related intimidation was common.

During a tour of Eskom’s power stations last year, amid record power outages, electricity minister Kgosientsho Ramokgopa acknowledged that employees were simply not valued. “Before you could get into the engineering issues, you could see that there are cultural issues there, how people are beaten and basically told that they are incapable,” he recalled during from a briefing in Cape Town.

A group of German consultants commissioned by the government to assess the situation came to the same conclusion. “The current crisis can only be overcome in power plants,” says the report led by vgbe energy eV, describing power plants occupied by unmotivated workers and training programs forgotten or neglected.

With improving working conditions and a break in power cuts, South Africa’s economy is expected to grow by more than 1% this year, which could help reduce the unemployment rate of 33.5%. of the country, one of the worst in the world. It could also help strengthen the coalition government that took power this summer after the African National Congress lost its majority.

Analysts have had mixed reactions to the public service recovery. Eskom’s performance “exceeded our expectations”, Raine Adams, an analyst at fund manager Allan Gray, wrote in comments to Bloomberg. Chiedza Madzima, head of operational risk research at BMI-Fitch Solutions, described the company as “painting a bright picture so far”. But, she warned, the utility is unlikely to return to pre-pandemic production levels until 2027, and then only if it has strong support from Transnet, a state-owned logistics company struggling with its own financial and operational problems, and whether it manages to lay 14,000 kilometers of transmission lines, a prospect she called “highly unlikely.”

Despite the challenges, Marokane, the new CEO, is looking beyond damage control and toward expansion. Eskom is currently looking for an executive to lead its new clean energy division, and the utility plans to bring an additional 2,500 megawatts online by March, Marokane said, the equivalent of a power plant small to medium size.

In the best case scenario, this could create a virtuous circle. Yvonne Mhango, Africa economist at Bloomberg Economics, noted that a recovery at Eskom would help spur the expansion of energy-intensive, job-creating sectors like manufacturing in South Africa.

For now, employees are hopeful, said Motubatse, the union leader. Getting through the winter without power outages for the first time in five years was a triumph, he said, and one that underscored the importance of coal-fired power plants. Affirming his group’s “full confidence” in the Eskom board and CEO, he sounded a note of optimism. “We think these are the glory days of Eskom.”

–With help from S’thembile Cele and Janice Kew.

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