The unbundling of ailing state-run power utility Eskom into three entities has passed a major threshold. The National Transmission Company of South Africa has achieved all the conditions required to become a separate company, the Department of Public Enterprises said on Thursday.

The separation of Eskom into generation, distribution and transmission companies is moving ahead.

"Eskom and the National Transmission Company of South Africa (NTCSA) have satisfied all the requirements necessary to effect the merger and the operationalisation of the NTCSA," the Department of Public Enterprises said in a statement on Thursday.

"The NTCSA is now on course to be a duly constituted separate, distinct, and wholly owned subsidiary of Eskom Holdings."

The unbundling of Eskom - in the face of union opposition - is seen as crucial for addressing the power shortages and rolling blackouts that are the biggest constraint to economic growth and investment in Africa's most industrialised economy.

It is also seen as a necessary step to restore solvency and financial viability to South Africa's debt-burdened, state-run power system.

The Department of Public Works said the "... primary anticipated benefits of the legal separation of the Transmission division from Eskom" include: "Improved business performance through the focused attention of the NTCSA executives on transmission-related matters."

This in turn is projected to increase "lender appetite" as the Treasury shuts the taps to SOEs while boosting the confidence of independent power producers "... of fair treatment in a future competitive electricity...