Eskom board chairperson Mteto Nyati has struck a somewhat cautious tone regarding the timing of the transfer of the utility’s transmission assets to the proposed independent Transmission System Operator (TSO).

“The Eskom board shares President Ramaphosa’s vision of an independent Transmission System Operator that will own the transmission assets at the appropriate point in the future,” Nyati said in a statement.

Eskom released the statement following President Cyril Ramaphosa’s July 31 endorsement of the Eskom Restructuring Task Team’s (ERTT’s) Phase I report, which was not itself made public.

In his endorsement, the President indicated that the ERTT confirmed that the establishment of the State-owned TSO was in line with international best practice and could be achieved without compromising Eskom’s financial sustainability.

While welcoming the Phase I work, Eskom highlighted the report’s emphasis on implementing the TSO in a manner that addressed lender requirements, avoided defaults, and ensured that Eskom was not placed in a worse financial position.

The amended Electricity Regulation Act, which came into force in early 2025, sets a five-year timeframe for the creation of the TSO, but the nature and composition of the TSO has emerged as an area of contestation.

In December, Eskom outlined a programme for the creation of the entity to operate the market and transmission system, but indicated that the assets would remain part of the National Transmission Company South Africa, an Eskom Holdings subsidiary.

In his State of the Nation Address, Ramaphosa insisted that the new TSO would own the transmission assets as part of reforms to introduce competition in the electricity sector to address structural weaknesses that had led to years of power cuts.

On July 31, that position was reaffirmed with the President’s endorsement of the ERTT report and in a statement confirming that endorsement, which reads: “The restructuring of Eskom to establish an independent transmission and system and market operator is a key enabler of the electricity reform agenda because it removes the inherent conflict of interest found in vertically integrated utilities.”

The move was welcomed by Business Leadership South Africa CEO Busisiwe Mavuso, who has been a leading proponent of the need for the TSO to be unbundled from Eskom and to own the assets.

That stance has been questioned by Nyati, however, who has used social media and interviews to insist that the board rather than the shareholder should drive the unbundling process and timing.

In the Eskom statement, Nyati again emphasised the board’s fiduciary responsibility to ensure that Eskom remained financially sustainable and to ensure supply security.

“It is precisely for these reasons that we fully support the pragmatic approach of treating electricity sector reforms as a carefully sequenced process with clear stage gates,” he said.

The statement added that the Phase II implementation process should safeguard Eskom's financial sustainability and appropriately address lender requirements, financing arrangements and contractual obligations.

“The establishment of an independent TSO is a material event for Eskom's lenders and will require careful engagement as the implementation pathway is developed.

“Successful reform and a financially sustainable Eskom are complementary objectives that will help support a stable, sustainable and investment-ready electricity [industry],” Nyati stated.