Eskom on track to split generation and transmission divisions by year-end

The debt-laden company is to be split into three divisions

South Africa's state power utility Eskom is on track to split its generation and transmission divisions by the end of the year, although some government and regulatory approvals are still pending, its chief executive said on Friday.

President Cyril Ramaphosa announced in 2019 that the debt-laden company would be split into three divisions - generation, transmission and distribution - to better manage a company that has relied heavily on government bailouts and frequently implements nationwide power cuts.

As per the approved plan, Eskom has to legally separate its generation and transmission divisions by the end of December 2021 and the distribution division by December 2022.

"We are on track to meet all of the Eskom targets for the legal separation of our transmission business by the end of the year," said chief executive Andre de Ruyter, while adding government and regulatory approvals were still pending.

The country's power regulator needs to grant a licence to the proposed transmission company before it can start operating and Eskom is exploring legal options to see the business can still operate while the licence award is awaited, Mr de Ruyter said.

For the transmission company to be operational, the country's Electricity Regulation Act also needs to be amended which could take 12 to 18 months, the chief executive said, adding options to overcome the lengthy process are also being studied.

Eskom, which had over 400 billion rand ($26bn) of debt at the end of March, runs an ageing fleet of 15 coal-fired power plants, with a nominal capacity of up to 47,000 megawatts. It meets up to 90 per cent of the country's power demand.

Updated: November 12th 2021, 1:17 PM