South African government plans to unbundle Eskom Holdings

The South African government plans to unbundle state-owned vertically integrated power utility Eskom Holdings SoC Limited (Eskom) into three separate utilities each for generation, transmission and distribution. The unbundling is aimed at supporting the debt-ridden firm in resolving its financial crisis. This will stabilise the accountability of the firm and attract new investments. The South African government also plans to support some of Eskom’s short-term debt issues. In early 2019, Eskom submitted a request to the National Treasury and the National Energy Regulator of South Africa (NERSA) for implementing an electricity price hike of 45 per cent over the next three years to help resolve its financial issues. The requested hike is much higher than the 4.41 per cent increase that was granted by NERSA to Eskom for 2019-20.

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