4 August 2026 | 15:45 CAT
2-minute read

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• Eskom’s transmission business is being prepared to become a fully independent state-owned grid company.
• Generation and distribution remain burdened by debt, ageing infrastructure and unpaid municipal accounts.
• An independent transmission company is seen as essential to attract investment and expand the grid for future renewable energy projects.

President Cyril Ramaphosa’s endorsement of the first-phase report of the Eskom Restructuring Task Team has renewed focus on one of the most significant reforms in South Africa’s electricity sector: the separation of Eskom’s transmission business into an independent state-owned company.

The report, submitted after missing earlier deadlines in May and June, reinforces government’s long-standing plan to unbundle Eskom into separate generation, transmission and distribution entities. The reform forms part of the broader Electricity Regulation Amendment process aimed at creating a more competitive electricity market and expanding grid capacity for new power projects.

Energy expert Chris Yelland said the transmission business has already been restructured into the National Transmission Company South Africa (NTCSA), but stressed that it remains under Eskom’s control.

“At the moment, it is not independent. It is under Eskom’s control as a subsidiary wholly owned by Eskom,” he said.

Yelland explained that the next step is to remove NTCSA from the Eskom group entirely so that it becomes a stand-alone state-owned company responsible for operating and owning the transmission grid and, eventually, the electricity market.

He argued that this separation is essential because Eskom’s generation and distribution divisions continue to weigh down the utility financially.

“Eskom as it stands at the moment is essentially insolvent. It relies on regular bailouts of R50 billion a year from national treasury, that means from the taxpayer,” he said.

According to Eskom’s latest annual results, municipal arrear debt has exceeded R100 billion, while the utility remains heavily indebted despite receiving substantial debt relief from government. Yelland said these financial pressures make it difficult for the transmission business to raise investment on its own.

“The idea is to separate it into a separate company with its own assets that will enable it to attract investment and borrow money and modernise the grid and upgrade it so that we have a future-ready grid that can take on new generation, in particular renewable energy,” he said.

South Africa’s transmission network has become a major bottleneck for renewable energy projects, especially in the Northern Cape, where grid capacity constraints have delayed new solar and wind developments. The independent transmission company is expected to play a central role in expanding the network and integrating additional generation capacity.

Yelland said government has clearly decided on the future of transmission, but has not yet reached a firm decision on the long-term structure of Eskom Generation or Eskom Distribution.

He warned that the distribution business remains particularly problematic because municipalities account for roughly half of Eskom’s electricity sales and many have failed to pay for bulk electricity purchases.

Yelland said government will ultimately have to resolve these issues because they involve both national and local government, adding that the current situation cannot continue indefinitely.

Listen to the full interview with Chris Yelland on Sabaahul Muslim, presented by Moulana Sulaimaan Ravat.