One of South Africa’s newest power plants, designed to supply the grid during peak-use periods, is defective and has been limited to operate at lower capacity.

The deepest power cuts in more than a decade imposed by cash-strapped, state-owned Eskom Holdings SOC Ltd. this month reduced the chances of the continent’s most-industrialized economy posting a stronger recovery from last year’s recession. Eskom is battling to meet demand and is considered one of the country’s biggest risks.

The Ingula pumped-storage project, a hydropower plant, was completed two years ago as part of the government’s program to boost generation capacity, was designed to provide at least 1,332 megawatts during periods of peak demand. However, two of its four units haven’t been operating as they are in a “defects-correction period,” Eskom said in an emailed response to questions.

“A defect has been identified on all four units and registered with the contractor,” which is Voith Siemens Hydro–Voith Fuji Hydro Consortium, the utility said. The units have been “derated” to 245 megawatts when multiple units are running, it said. That means that when all units are operational the plant is running at least 25 percent below its installed capacity.

The country struggled through 10 days of power outages in March after failures at aging power plants, defects in new coal-power plants that cost billions of dollars and a cyclone that curbed electricity imports from Mozambique slashed supply.

A solution at the Ingula plant “is currently in the development stage,” the utility said.

Ingula generates electricity as water travels from an upper reservoir, through turbines and into a lower reservoir, from where it is pumped back up. The cumulative cost of the project was 29.3 billion rand ($2 billion) compared with an estimated 21.8 billion rand in 2010, according to Eskom’s annual reports.

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