South Africa will publish its roadmap for Eskom’s restructuring in coming weeks

The Government of South Africa will publish a roadmap on restructuring the state-owned power utility Eskom in the next few weeks, summarizing how it intends to restore its long-term sustainability. A key proposition is to unbundle the public company into different units for transmission, generation and distribution. This process could take four years, and up to five years to separate the transmission activities into a separate state-owned company.

Eskom, which supply than 90% of the power in South Africa, is reliant on state bailouts to keep operating and has had to implement rolling power cuts due to technical problems in operating power plants and massive delays in its newbuild programme. Additional difficulties come from a sharp rise in wages, fuel and debt-servicing costs over the last ten years, as well as corruption. The company also considers that tariff hikes by the South African regulator have been insufficient to cover its rising costs. The group reported a loss of ZAR 20.7 bn (U$1.36b) in its most recent financial year.