South Africa moves forward with plans to split Eskom into separate entities

NERSA has authorized the National Transmission Company of South Africa to operate a transmission system independently from troubled state-owned utility Eskom, within national boundaries. The move is part of the government’s plan to split Eskom into three separate entities: Generation, Transmission, and Distribution.

“This is a milestone decision by the dnergy fegulator and will immensely contribute to Eskom’s unbundling trajectory,” said NERSA Chairperson Thembani Bukula.

The National Transmission Company of South Africa’s independence ensures non-discriminatory access to the transmission system and responsibility for grid stability, with the authority to buy and sell power but not for profit, said NERSA.

South African President Cyril Ramaphosa said that the split of Eskom would improve funding and allocate responsibilities appropriately.

“We undertake these measures without delay to stabilize Eskom’s finances, ensure electricity supply security, and establish the basis for long-term sustainability,” he said.

South Africa’s National Treasury is crafting a bill to address Eskom’s unsustainable ZAR 423 billion debt with a ZAR 254 billion debt relief arrangement. The bill proposes advances of ZAR 78 billion in 2023-24, ZAR 66 billion in 2024/25, and ZAR 40 billion in 2025-26, specifically designated to cover capital and interest payments.

Currently, Eskom remains the sole buyer of power generated under the country’s Renewable Energy Independent Power Producer Procurement Program (REIPPP).