Eskom is trying to push back the separation of its transmission business, but Business Day reports it faces an uphill battle. The Development Bank of Southern Africa (DBSA) has told transaction advisers that the split of Eskom’s grid is still set for the end of 2027, sooner than Eskom’s management has asked for.
The split is part of the government’s electricity sector reform agenda. The government has tasked the DBSA with finding advisers to help set up an independent, state-owned transmission system operator (TSO) that will own and operate the transmission assets by the end of 2027. Business Day cites the Electricity Regulation Amendment Act as requiring an independent TSO outside Eskom. Transmission assets account for about 37% of Eskom’s revenue.
The DBSA has told advisers they must not revisit the policy decision to create the TSO, and must build on the work of the Eskom Restructuring Task Team, which is led by Treasury Director-General Duncan Pieterse. President Cyril Ramaphosa appointed that team in February 2026. In August 2026, Ramaphosa endorsed its first-phase report, which said Eskom must be stripped of transmission for meaningful reform.
What Eskom is worried about
Eskom says it supports a TSO but questions the timing and speed. It argues that a rushed process would leave both the new operator and Eskom worse off. Its concerns include a rushed unbundling at a time of surging municipal debt, damage to its balance sheet, and possible breaches of obligations to group bondholders. Consent from lenders across a large part of its debt portfolio may also be needed.
Eskom wants to keep the transmission assets in the medium term. It says a botched unbundling would expose R840bn, more than 10% of GDP. Eskom chair Mteto Nyati has called for a staged process to minimise the risk of financial ruin, and has said the creation of the TSO is a material event for Eskom’s lenders. Earlier, EWN reported that Nyati warned an early move could trigger change-of-control clauses in loan agreements, create accounting complications and unsettle bondholders, and that Eskom wanted the new operator to work independently before any ownership transfer.
Business Day reports that Eskom’s top management is relying on the second phase of the restructuring team’s work to argue that a 2027 split would cause financial ruin.
What the DBSA says the split must achieve
The DBSA says the approach must minimise financial, operational and fiscal risk. Among its principles for the TSO are maintaining energy security, ensuring the TSO is fully independent of all market participants, ensuring Eskom is not worse off than it is now and that the TSO is financially sustainable, and ensuring the TSO can raise funding for infrastructure in line with the transmission development plan. It also wants to avoid a qualified audit opinion for Eskom, the National Transmission Company South Africa or the TSO, and to address lender concerns so as to prevent defaults.
Advisers will also be asked to propose tax-efficient ways of transferring the assets, covering taxes such as degrouping tax, VAT, capital gains tax, dividends tax, securities transfer tax, transfer duty, company income tax and carbon tax.
Big business, according to the report, has questioned the board’s commitment to implementing the government’s decision to strip Eskom of its transmission assets.
For related coverage of Eskom’s own recent operational performance, see this site’s report on Eskom’s Energy Availability Factor.
