Eskom told Business Day that extending the timetable for the separation of its transmission business past the end of 2027 will be an “uphill battle”. The utility’s statement frames the delay as a matter of legal deadlines, financing arrangements and the need to keep the national grid running without interruption.
The split, formally known as the unbundling of Eskom Transmission, is a core component of the government’s electricity sector reform agenda. Under the Electricity Regulation Act, the transmission function must be transferred to a stand-alone entity by the end of 2027. The move is intended to create a more transparent, commercially viable operator that can attract private investment and improve the reliability of the high-voltage network.
Eskom’s claim that a postponement would be hard to achieve rests on three practical concerns. First, the legal framework that mandates the split includes a fixed deadline; any amendment would require a formal amendment to the Act, a process that could take months of parliamentary debate. Second, the financing of the new transmission company, which will need to raise billions of rand to fund network upgrades and maintenance, is tied to the split schedule. Lenders and bond investors have been given a clear timetable, and a shift could trigger covenant breaches or higher borrowing costs. Third, the operational hand-over involves complex asset valuation, staff redeployment and the re-routing of contracts, all of which must be coordinated without risking blackouts.
Why the timing matters for the wider power sector
Delaying the split could have knock-on effects for other parts of the electricity value chain. Generation assets, which already operate under a separate commercial model, rely on an independent transmission operator to provide open access to the grid. If the transmission entity remains under Eskom’s umbrella, the perception of an uneven playing field may deter private generators from investing, especially as the country pursues renewable-energy projects to meet its climate commitments.
For small and medium-sized enterprises, the stakes are indirect but real. An efficient, well-funded transmission network reduces the frequency and duration of load-shedding events, which are a costly disruption for manufacturers, retailers and service providers. A delay that slows infrastructure upgrades could therefore keep the cost of power interruptions high, eroding profit margins for many South African SMEs.
Industry analysts have noted that the transmission split was originally slated for 2025, but was pushed to 2027 to give Eskom more breathing room after a series of financial setbacks. The utility’s current warning suggests that even the extended deadline may be optimistic given the scale of the tasks involved.
Stakeholders such as the Department of Mineral Resources and Energy (the regulator) have not publicly commented on the specific claim made by Eskom. Their position will be crucial, as any regulatory endorsement of a new timetable would be needed to satisfy both legal and financial requirements.
In the meantime, Eskom says it will continue to prepare the necessary documentation and asset-valuation reports, while engaging with lenders to keep financing arrangements flexible. The utility acknowledges that a formal request to amend the deadline would have to be lodged with the Minister of Energy and would be subject to parliamentary scrutiny.
Whether the government will grant an extension remains to be seen. For now, the utility’s statement underscores the complexity of unbundling a megaproject that underpins the entire national grid.
Why the deadline itself, not just the split, is doing the work
A legally binding deadline changes the negotiating dynamics of a restructuring like this in a way a voluntary target cannot: lenders, bondholders and private generators can price their own decisions around a fixed date with real consequences attached, rather than an open-ended commitment that could slip indefinitely without penalty. That is precisely why Eskom’s own warning about the difficulty of extending the deadline is, in effect, an argument for keeping the pressure on rather than against it, since removing the fixed date would also remove the main mechanism forcing the finance and legal work to actually get done on a predictable timeline rather than drifting the way many previous Eskom reform commitments have.
