KEY POINTS
- Eskom and BLSA jointly endorsed an independent transmission system operator holding the grid assets, ending a public standoff over the reform.
- The disputed transmission assets are worth about 110 billion rand, with Eskom having pushed to launch the TSO initially without them.
- Both back a sequenced process safeguarding Eskom’s finances, lenders’ rights and energy security, while pledging to engage on remaining implementation differences.
Eskom and Business Leadership South Africa have issued a joint statement backing the creation of a transmission system operator that holds the grid assets, while pledging to work through their differences on how to implement the reform.
The move follows public friction between the two. Specifically, they clashed over Eskom’s reluctance to accept a government-endorsed plan to create a separate state-owned TSO outside Eskom, holding transmission assets worth about 110 billion rand.
Rival visions for the grid
The disputed vision came from a Phase 1 report by the Eskom Restructuring Task Team, set up after President Cyril Ramaphosa’s State of the Nation Address. Notably, Ramaphosa contradicted an Eskom plan that would have run the transmission system and market through a TSO while keeping the grid assets inside an Eskom Holdings subsidiary.
Since the President backed the Phase 1 report, BLSA has argued that a separate entity holding the assets is essential to level the playing field in a competitive electricity market. However, Eskom, mainly through chairperson Mteto Nyati, kept flagging the risks of such a transfer for the utility and its bondholders, and it pushed to establish the TSO initially without the assets.
Common ground, with caveats
Nevertheless, the two sides have now moved closer. According to the joint statement, Nyati initiated direct and constructive engagement on the reform programme and its implementation challenges. Moreover, both organisations said they fully support the reform effort, the Task Team’s work and the Phase 2 process now under way.
Consequently, they endorsed the outcome the President backed, an independent TSO with the transmission assets, delivered through a carefully sequenced process. Furthermore, they said that process must safeguard Eskom’s financial sustainability, respect lenders’ rights and protect energy security, framing reform and a viable Eskom as complementary rather than competing goals.
Still, the two acknowledged they will not agree on every detail. Therefore, they committed to engaging directly and on the substance whenever differences arise. Ultimately, both cast the reforms as vital to lifting South Africa’s growth rate and the jobs that depend on it, pledging to play their part in making the overhaul succeed.
