South Africa Rebukes Eskom Chair as Grid Reform Push Intensifies
South Africa’s Presidency has publicly rebuked Eskom chair Mteto Nyati after he warned that rushing the utility’s transmission unbundling could unsettle lend...
South Africa’s Presidency has publicly rebuked Eskom chair Mteto Nyati after he warned that rushing the utility’s transmission unbundling could unsettle lenders and weaken Eskom’s finances. The dispute lands at the heart of President Cyril Ramaphosa’s push to open the electricity market and draw in private investment.
Nyati has argued that the grid transfer needs to be timed carefully. Eskom supports the long-term creation of an independent Transmission System Operator, but the chairman says ownership of the physical transmission assets should move only after the utility’s financial position steadies and legal, creditor and structural issues are sorted out.
Financial stability first
The chairman has said Eskom is not resisting reform. “Eskom is agnostic about who owns the assets,” he told CNBC Africa, stressing that the key issue is whether the entity left behind can still support South Africa’s growth agenda.
He has also warned that moving too fast could trigger change-of-control clauses in loan agreements and spook creditors. Nyati said Eskom’s debt stands at about 350 billion rand, making the sequencing of the transfer crucial.
The Presidency, however, has pushed back hard on his public remarks and says the transmission carve-out will not damage Eskom’s balance sheet. Government is pressing ahead with grid reform and plans to appoint transaction advisers to negotiate with creditors as part of the process.
Pressure builds around reform pace
Business Leadership South Africa and other stakeholders have accused Eskom’s leadership of dragging its feet on the electricity market overhaul. Ramaphosa set out the reform roadmap last April, with the South African Wholesale Electricity Market expected to be operational by the third quarter of the year under the National Transmission Company of South Africa.
Nyati has rejected the idea that Eskom and government are fighting over the future of the grid. Speaking on 702, he said both sides want the same end state, and only differ on timing. “We are singing from the same hymn sheet,” he said.
The row now sits on a narrow point: who owns the wires, when the handover happens, and whether lenders stay calm while South Africa tries to reshape its power sector. The next move will come from the advisers government appoints to face creditors.
