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South Africa power utility Eskom delays its unbundling after 2022

According to Eskom’s CEO, the South African state-owned power utility will not meet the unbundling timetable due to legal processes. As presented in November 2019, the company was expected to be split into three separate companies dedicated to power generation, transmission and distribution by the end of 2022. The 3 companies would remain under a state-owned holding company but Eskom would abandon its near-monopoly and face increased competition from independent power producers (IPPs) with lower power generation costs. In March 2020, the company concluded power purchase and energy supply agreements and created an internal electricity market. Eskom, which relies on ageing, heavily polluting coal-fired power plants, is under the pressure of its ZAR450bn (US$26.7bn) debt.

In February 2020, the Ministry of Mineral Resources and Energy announced that the government intends to create a new power generation company, distinct from Eskom. Ideally, the new power generation company would be a partnership between the government and private investors and would use diversified energy sources (clean coal, gas and solar power). The type of company - state or privately-owned - and its scope remain to be determined; investors are invited to partner with the government or to invest on their own to create a new company.