Unbundling Eskom is taking too long, says CEO André de Ruyter

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Power utility Eskom sent the government a list of potential board members for a national transmission company a year ago and it is still waiting for them to be appointed, says CEO André de Ruyter.

While praising the speed of some of SA’s electricity reforms, he said it was taking too long for the independent transmission company to receive the necessary licences, legal framework and board in order for it to start operating.

De Ruyter was being interviewed by Minerals Council CEO Roger Baxter at the Investing in African Mining Indaba in Cape Town on Tuesday.

He said Eskom had done everything in its power to enable the legal separation of its transmission business.

“At Eskom, we have done everything that we can. We concluded an asset transfer agreement. We have set up the National Transmission Company of SA,” he said.

“We have set up separate balance sheets, [and] income statements. We have separated SAP [software]. That is no minor exercise,” he said.

The unbundling of Eskom into three separate units — transmission, generation and distribution — was announced by President Cyril Ramaphosa in 2019. A legally binding merger agreement, in which Eskom agreed to transfer its transmission division, was finalised in December 2021 and in the same month it applied to the National Energy Regulator of SA (Nersa) for licences for the transmission, trading, import and export of electricity.

De Ruyter said: “We are still waiting for a number of licences. We are waiting for some legislative changes. And that has not been happening as quickly as it should have.”

A transmission company would manage the bulk movement of electricity from a power plant to an electrical substation. A separate transmission company is essential to ending load-shedding and driving power generation. It would allow independent producers to compete fairly with Eskom when selling power onto the grid, the outgoing CEO explained.

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