Johannesburg: The establishment of an independent, state-owned Transmission System Operator (TSO) is central to the government's efforts to secure a reliable, affordable, and sustainable electricity supply for all South Africans. The restructuring of the power utility forms part of government reforms with the TSO remaining state-owned, controlling and owning transmission assets, and being responsible for operating the electricity market.

According to South African Government News Agency, in July, President Cyril Ramaphosa endorsed the Phase I report of the Eskom Restructuring Task Team (ERTT), setting the stage for the restructuring-a move supported by Eskom. 'The Eskom Board shares President Ramaphosa's vision of an independent Transmission System Operator that will own the transmission assets at the appropriate point in the future. Equally, the Board has a clear fiduciary responsibility to ensure that Eskom remains financially sustainable so that energy security can continue to power South Africa's growth,' Eskom Board Chairman Mteto Nyati said earlier this month.

Eskom noted that the TSO's establishment should be implemented in a manner that addresses lender requirements, avoids defaults, and ensures that Eskom is not placed in a worse financial position and appropriately considers shareholder rights and interests. 'As Phase II of the reform process commences, it is important that the implementation process safeguards Eskom's financial sustainability and appropriately addresses lender requirements, financing arrangements, and contractual obligations,' Mteto stated.

Mounting municipal arrear debt, which has reached at least R119 billion, presents a challenge to stabilizing South Africa's energy grid. To tackle this challenge, the ERTT proposed the establishment of a dedicated workstream to develop solutions to municipal arrear debt. 'The ERTT has proposed that a working group develop a consolidated action plan, encompassing all initiatives aimed at arresting the growth in municipal arrears and identifying those to be scaled up and accelerated,' the Presidency said in July.

Announcing the endorsement of the ERTT's Phase I report of the restructuring, President Ramaphosa noted that he is 'encouraged by the speed and diligence with which the task team has taken forward this important task.' 'The establishment of a fully independent transmission company is a critical reform which will support the introduction of a competitive electricity market and ensure a reliable, affordable, and sustainable electricity supply to power the economy,' President Ramaphosa said.