Presidency Rebukes Eskom Chairman Mteto Nyati Over Transmission Unbundling Concerns
- Eskom Chairman Mteto Nyati warned that separating transmission assets could trigger financial and legal complications for the utility
- Presidential spokesman Vincent Magwenya hit back, saying Nyati created a false impression of the unbundling process
- Treasury Director-General Duncan Pieterse confirmed that advisers will soon begin lender negotiations over the planned separation
PAY ATTENTION: Mark Briefly News as a preferred source, and our content will appear higher in your Google feed!
Source: Getty Images
SOUTH AFRICA — The presidency has publicly contradicted Eskom Chairman Mteto Nyati after he raised concerns that separating the utility's power transmission assets could damage its financial position and unsettle lenders.
News24 reported that Nyati warned that transferring transmission assets to an independent operator risked activating change-of-control clauses in Eskom's lending agreements, creating accounting complications, and alarming bondholders. Transmission assets account for roughly 40% of Eskom's earnings, according to Nyati, who argued that removing them before the utility's legacy debt is resolved could weaken its balance sheet considerably. Eskom does not oppose the creation of an independent transmission operator but wants to retain ownership of those assets during an interim phase.
Presidency pushes back on Nyati
Presidential spokesman Vincent Magwenya responded on Tuesday, stating that Nyati created "a false impression that the process is occurring without Eskom or to its detriment." Magwenya stressed that all concerns had been thoroughly discussed across government and directly with Eskom, and that authorities remain committed to protecting the utility's financial position throughout the restructuring.
PAY ATTENTION: You can now search for all your favourite news and topics on Briefly News.
Magwenya also confirmed that the Eskom Restructuring Task Team includes representatives from President Cyril Ramaphosa's office, the National Treasury, the Department of Electricity and Energy, Eskom itself, and the National Transmission Company South Africa. He reiterated that establishing an independent transmission system operator remains a key policy objective under the Electricity Regulation Act, aimed at fostering market competition and driving economic growth.
Lender talks on the horizon
Treasury Director-General Duncan Pieterse confirmed that financial advisers would soon open negotiations with Eskom's lenders regarding the planned separation of its transmission operations. The move signals that the government is pressing ahead with the unbundling despite the chairman's reservations.
The dispute lays bare growing tension over the pace and sequence of Eskom's structural break-up. President Ramaphosa has previously backed the creation of an independent transmission system operator as part of a broader push to liberalise South Africa's electricity market and reduce the country's dependence on the struggling state-owned entity.
Eskom admits to service delivery challenges
In a related article, Briefly News reported on Eskom's service delivery challenges as admitted by Nyathi during a recent BizNews conference. He emphasized the urgent need for patience from the public while acknowledging the ongoing issues in electricity provision, despite the cessation of loadshedding.
PAY ATTENTION: Follow Briefly News on Twitter and never miss the hottest topics! Find us at @brieflyza!
Source: Briefly News
