Ramaphosa endorses plan to restructure Eskom
President Cyril Ramaphosa has endorsed the Phase I report on the establishment of an independent Transmission System Operator (TSO), marking a significant step in the restructuring of South Africa’s electricity sector.
The report, compiled by the Eskom Restructuring Task Team (ERTT), sets out recommendations to separate the transmission function from Eskom and create an independent operator to manage the national grid and electricity market.
The Presidency says the move is aimed at introducing greater competition, unlocking investment, reducing electricity costs and ensuring long-term energy security.
"This report shows how government can ensure that the architecture of the electricity sector can change as the sector continues to evolve, creating the foundation for South Africa's growth. It is welcomed that all the key stakeholders are aligned on this objective," says Presidency spokesperson Vincent Magwenya.
The proposed TSO will operate independently from Eskom and is expected to play a central role in enabling a competitive wholesale electricity market. Government believes the reform will support economic growth, job creation and more reliable electricity supply.
According to the report, the restructuring is feasible, aligns with international best practice and can be implemented without compromising Eskom’s financial sustainability.
It also highlights the urgent need to address rising municipal debt owed to Eskom, warning that it poses a significant risk to the utility and the broader electricity sector.
Phase II of the process, which begins immediately, will focus on developing a detailed transaction structure and implementation plan over the next three months.
In the interim, measures will be introduced to strengthen the independence of the National Transmission Company of South Africa (NTCSA), including governance reforms and the separation of key operational and financial functions from Eskom.
Among the proposed changes, Eskom board members will not serve on the NTCSA board, while the appointment of the NTCSA’s executive leadership will fall solely under its own board to ensure independence.
The report also outlines steps to unbundle electricity tariffs, clarify payment systems in a restructured market, and introduce mechanisms to protect market participants from non-payment.
Government says decisions on access to the transmission network will gradually shift from Eskom to the NTCSA and ultimately to the independent TSO, ensuring fair and non-discriminatory access to the grid.
The establishment of an independent transmission operator is a key pillar of South Africa’s electricity reform programme, aimed at creating a more competitive, efficient and sustainable energy sector.
Phase II outcomes are expected to provide clear timelines for implementation as government moves to overhaul the country’s electricity market.
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