By Lehlohonolo Lehana.
Public Enterprises Minister Pravin Gordhan has given his consent for the transfer of Eskom’s distribution assets from Eskom Holdings to a newly established distribution company.
However, independent boards have yet to be appointed at any of the entities, including the National Transmission Company of South Africa (NTCSA), whose unbundling has been prioritised.
Gordhan reminded citizens that the intention to restructure Eskom was first pronounced by President Cyril Ramaphosa’s 2019 State of the Nation Address (SONA) when he mandated the process to transform the structure of the electricity industry to better serve the needs of the country.
Ramaphosa announced the process of establishing three separate entities – Generation, Transmission and Distribution – under Eskom Holdings.
“The implementation of the Eskom roadmap and current legislation before Parliament will result in a restructured electricity industry.”
Globally, the energy sector is rapidly changing due to new technologies, transforming customer behaviours and climate change policies.
“Eskom’s current structure is no longer suitable to meet the country’s energy needs.”
According to Gordhan, Eskom Holdings currently owns all Generation, Transmission and Distribution assets, of which these assets belong to the state.
“The reform of Eskom requires the ‘restructuring of Eskom’. This means establishing three separate companies housing Generation, Transmission and Distribution businesses – 100% owned by the state,” He said
“To implement the above, corresponding assets need to be transferred from Eskom Holdings to each of the new companies.”
The minister added that this requires approval in terms of the Public Finance Management Act (PFMA) Section 54 (2), (c) and (d).
In terms of this section, He said the consent of both Ministers of Finance and Public Enterprises is required for the transfer of these assets into the newly established distribution company.
Gordhan believes that the restructuring process is a crucial part of ensuring energy security in the future for all South Africans.