The Portfolio Committee on Electricity and Energy has called on Eskom to provide clearer details on its unbundling strategy and to communicate the process more transparently to key stakeholders, particularly business, amid concerns about the independence of the proposed new entities in the electricity sector.
The call followed a briefing from Eskom to the committee on Thursday during its four-day oversight visit to Limpopo and Gauteng, where Members of Parliament interrogated progress on the power utility's long-awaited unbundling reforms.
At the centre of the committee's concerns is the establishment of an independent transmission system operator (TSO), which is expected to play a critical role in managing South Africa's electricity grid. Business stakeholders have raised questions about whether the TSO can truly operate independently if the grid remains owned by Eskom's transmission subsidiary, the National Transmission Company of South Africa.
Committee chairperson Ms Nonkosi Mvana said the reform process would only succeed if it inspired confidence and certainty among investors and electricity market participants. "The unbundling of Eskom is a significant reform in the electricity sector, and it is critical that all stakeholders, particularly business, have a clear understanding of how the new entities will function and how independence will be ensured," Ms Mvana said.
Follow us on WhatsApp | LinkedIn for the latest headlines
The committee acknowledged Eskom's assurance that it has already engaged with business stakeholders on two occasions to clarify the role of the TSO. Eskom further indicated that the mandate, functions and independence of the TSO will be explicitly defined in the legislation that establishes it.
According to Eskom, the passage of the necessary legislation and the full operationalisation of the TSO are expected to be completed by April 2029.
The committee also took note of timelines presented by Eskom for other entities arising from the unbundling process. Eskom told MPs that the establishment of a green energy company is expected to take approximately two years, while the formation of a standalone generation company could take up to four years.
In addition, Eskom indicated that the creation of the National Electricity Distribution Company of South Africa, targeted for 2030, will depend primarily on progress in stabilising municipal debt. This will be pursued through the implementation of distribution agency agreements with municipalities, as approved by Cabinet.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Ms Mvana stressed that unresolved municipal debt remains a major risk to electricity sector reform. "The issue of municipal debt is a critical factor in the success of electricity sector reform, and the committee will be closely monitoring progress in this regard," she said.
The committee reiterated its commitment to exercising robust oversight over Eskom's unbundling process to ensure that the reforms contribute to a transparent, efficient and sustainable electricity sector.
Justice Molafo
