(Bloomberg) — Aslina Wines, an independent winemaker nestled among the rolling vineyards of Stellenbosch, counts a large generator among its most valuable inventory. He relied on the machine to keep him running during the worst of South Africa’s power outages, which affected the country for 332 days last year. Bağcı was lucky. Bradwin Persent, Aslina’s operations and logistics coordinator, said that, like many of the country’s struggling small businesses, suppliers without generators were “hit hard” as the severity of power outages increased.

Then, in March, the outages suddenly stopped. Even as we head into winter in the southern hemisphere, where electric heaters and early sunsets increase demand, Eskom, the troubled state utility that produces most of South Africa’s energy, has managed to keep the lights on.

It has been seven months and counting since the country’s last outage. Persent is happy with his winning streak but has no plans to get rid of the generator. “We are happy,” he said, “but we are not comfortable.”

Chronic power outages have disrupted South Africa for years. These measures, first implemented in 2008, cost the economy up to 899 million rand ($52 million) a day, according to central bank estimates, and were a big reason why the ruling African National Congress lost its majority in elections last June. Attempts to reform a civil service gutted by corruption have failed over the years; a comprehensive privatization plan collapsed; The effort to add production capacity dragged on and was never fully implemented. Theft and sabotage at power plants became even more daring.

Now the situation seems to be stabilising. The effects of recent and long-standing reforms have radically improved employee morale, making a big difference in helping Eskom get back on its feet, according to experts, analysts and officials. The decision to postpone the decommissioning of three coal-fired power plants also played a major role.

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

Eskom’s recovery began to attract attention in March, when weeks went by without disruption. This happened when Dan Marokane took over as the new CEO of the company. He initially won the support of labor by calling for the repair of broken power plants and the renewal of the company’s management structure; This marked a break with previous leadership that focused on transitioning away from coal.

At the same time, a $14 billion debt relief plan was enacted. The proliferation of solar panels across the country, a popular alternative to relying on Eskom, has eased pressure on the grid. As the price of the mineral fell, coal theft decreased. Power plants were allowed to return parts to their original manufacturers for repairs, making operations more reliable.

Efforts to prevent crime also yielded results. Small-scale sabotage and theft at power stations has become commonplace as former President Jacob Zuma’s government plunders the utility’s bank accounts. Contractors were known to steal and resell parts multiple times, and thieves would replace entire truckloads of coal with rocks. But between April and August this year, a joint effort by the police, the national prosecutor’s office, the revenue administration and a special investigation unit reduced crime by 28% compared to the same period the previous year.

University of the Witwatersrand economist Lumkile Mondi, who has written extensively about Eskom, said the efforts of law enforcement and the courts had yielded “extraordinary” results.

Fragile Rescue

It has been a long time since Eskom employees had reason to be optimistic. Not only was the company publicly vilified every time the lights went out, but workers were also expected to work under nearly impossible conditions. Stations undergoing major repairs had their parts held up in complex processes, performance-related bonuses were suspended for years, and corruption-related intimidation was common.

When Electricity Minister Kgosientsho Ramokgopa toured Eskom’s power stations during record power outages last year, he realized that workers were completely undervalued. “Before we got to the engineering questions, you could see there were culture issues here, how people were being beaten and essentially being told they were incompetent,” he recalled during a briefing in Cape Town.

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

With working conditions improving and cuts at least paused, South Africa’s economy is projected to grow by more than 1% this year; This could help reduce the country’s 33.5% unemployment rate – among the worst globally. It could also help strengthen the coalition government that came to power this summer after the African National Congress lost its majority.

Analysts had mixed reactions to the utility’s recovery. Raine Adams, an analyst at fund manager Allan Gray, wrote in a statement to Bloomberg that Eskom’s performance “exceeded our expectations.” Chiedza Madzima, head of operational risk research at BMI-Fitch Solutions, described the company as “painting a bright picture for now.” However, he noted that the company is not expected to return to pre-pandemic production levels until 2027, and this will only be possible if it receives and manages strong support from Transnet, a state logistics company struggling with its own financial and operational problems. He described the possibility of laying 14,000 kilometers of transmission lines as “very improbable.”

Despite the challenges, new CEO Marokane is looking beyond damage control and towards expansion. Marokane said Eskom was currently looking for an executive to head its new clean energy division and the company expects to commission a further 2,500 megawatts, the equivalent of a small and medium-sized power plant, by March.

In the best case scenario, this can create a virtuous cycle. Yvonne Mhango, Africa economist at Bloomberg Economics, said the recovery at Eskom would help fuel the expansion of energy-intensive, job-creating sectors such as manufacturing in South Africa.

Union leader Motubatse said employees are hopeful for now. He said going through the winter without power outages for the first time in five years was a victory and underlined the importance of coal stations. He struck an optimistic tone, saying his group had “full confidence” in Eskom’s board and CEO. “We believe these are glory days for Eskom.”

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

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