Eskom Backs Independent Grid Operator While Seeking Financial Safeguards

The utility said the reforms could modernise South Africa's electricity sector while stressing that the transition must protect Eskom's financial stability.

Eskom has welcomed President Cyril Ramaphosa's approval of the first phase of the Eskom Restructuring Task Team (ERTT) report, saying it supports the government's plan to establish a fully independent, state-owned Transmission System Operator (TSO). The utility said the reforms could modernise South Africa's electricity sector while stressing that the transition must protect Eskom's financial stability.

The announcement marks another step in the country's efforts to create a more competitive electricity market that attracts investment, strengthens energy security and supports long-term economic growth.

Reform plan moves into next phase

President Ramaphosa endorsed the ERTT Phase I report, which outlines a framework for restructuring the electricity sector. The report aims to create greater competition, encourage investment, reduce electricity costs and improve the reliability of power supply.

Eskom said it supports the overall direction of the reforms, particularly the proposal to establish an independent transmission operator that will eventually own and manage the country's transmission assets.

The utility noted that the report recognises the importance of protecting lender interests, avoiding financial defaults and ensuring Eskom is not left in a weaker financial position during the transition.

Financial stability remains a priority

Eskom Board Chairperson Mteto Nyati said the board shares the President's vision of creating an independent Transmission System Operator while also recognising its responsibility to maintain Eskom's financial sustainability.

He said the restructuring should follow a carefully sequenced approach with clearly defined milestones. As work begins on the second phase of the reforms, Nyati said the implementation process must address lender requirements, financing arrangements and existing contractual obligations.

He added that establishing an independent TSO represents a significant development for Eskom's lenders and will require close engagement to ensure the transition is managed responsibly.

Municipal debt remains a major concern

Eskom also welcomed the recommendation to establish a dedicated workstream to tackle municipal debt, describing the issue as critical to the utility's long-term financial health.

Municipal arrear debt has reached R119 billion, placing additional pressure on Eskom's finances and its ability to meet existing debt obligations. The utility said resolving this challenge will be an important part of developing a sustainable pathway towards a fully independent transmission operator.

Supporting a modern electricity market

According to the ERTT report, the proposed restructuring is achievable and aligns with international best practices without undermining Eskom's financial position. The report also identifies immediate actions that can help advance the reform process while addressing challenges such as rising municipal debt.

Eskom said it remains committed to supporting South Africa's electricity market reforms and will continue engaging with government, lenders and other stakeholders as the restructuring process moves forward. The utility believes a financially sustainable Eskom and a successful electricity market reform programme can work together to strengthen energy security and support future investment.