Eskom’s dedicated transmission company one step closer

Public enterprises Minister Pravin Gordhan and Eskom board chairperson Mteto Nyati have announced Eskom and the National Transmission Company of South Africa (NTCSA) have satisfied all the requirements necessary to effect the merger and operationalisation of the newly formed electricity transmission company.

The suspensive conditions included getting consent from relevant lenders and creditors, the passing of resolutions by the government and the NTCSA and Eskom boards, as well as electricity licence and regulatory approvals by the National Energy Regulator of South Africa (Nersa).

“The separation of the transmission division from Eskom is a ground-breaking undertaking, and meeting all the suspensive conditions was made possible by the collaborative efforts of all key parties, including government, lenders, and Eskom,” the minister and chairperson said in a joint statement.

“NTCSA is now on course to be a duly constituted separate, distinct, and wholly owned subsidiary of Eskom Holdings as per the provision of the Companies Act.”

Gordhan said the development was key in the government’s pursuit of a restructured, competitive and dynamic electricity market that would usher in a secure and reliable energy future for South Africans.

Nyati described meeting the suspensive conditions as a significant milestone in Eskom’s turnaround plan.

“The separation of the Transmission Division from Eskom will now set the NTCSA on the path for operationalisation once the necessary statutory requirements as per the Companies Act have been concluded,” Nyati said.

“It is anticipated that the NTCSA will commence trade about two months from the completion of these requirements,” the minister and chairperson said.

“Once all assets, systems, and employees have been transferred to the NTCSA, and trade commences, the NTCSA will be a wholly-owned Eskom Holdings subsidiary.”

The transmission division is the first to be spun off from Eskom into its own company, five years after President Cyril Ramaphosa announced a plan to divide the utility into three separate entities.

The utility also plans to separate its generation and distribution divisions into their own companies.

For Eskom and the electricity industry as a whole, the primary anticipated benefits of the legal separation of the transmission division from Eskom are:

• Improved business performance through the focused attention of the NTCSA executives on transmission-related matters
• Increased lender appetite due to the focused and dedicated scope of the NTCSA business
• Increased confidence for IPP generators of fair treatment in a future competitive electricity market