Eskom would be split into three entities in future: Ramaphosa

The President pointed out that while South Africa was the biggest energy producer on the continent, this had come at a huge financial cost.

President Cyril Ramaphosa has reiterated that the government’s attempts to reconfigure and split Eskom into three divisions are not aimed at privatizing the embattled power utility. 

These measures, he said, are rather aimed at stabilizing the utility and getting it back on its feet.

“We are not going to privatize Eskom,” he said, comparing the move to auctioning one’s family for silver. “Eskom is going to continue being owned by our government.”

To reverse the entity’s current predicament, the government has announced drastic interventions, ranging from addressing debt to operational matters. 

The President made the remarks while addressing Eskom workers and contractors at the Medupi Power Plant in Lephalale in Limpopo today. He is in the area for the launch of the third leg of the District Development Model. 

In his State of the Nation Address early this year, President Ramaphosa announced that Eskom would in the near future be split into three entities focusing operations, distribution and transmission. 

On Tuesday, he reiterated that there were no sinister motives behind the move.

“This has been done all over the world. China has done it, Brazil has done it, a number of countries in Africa have done it, some countries in Europe have done it. They have done the focus areas of the business so that they can maximize and get people to pay so that they operate efficiently. And that is precisely what we are seeking to do,” he said. 

President Ramaphosa further announced that Unit Two has today come into operation. Unit One is expected to come into transmission sometime next year. 

He also used the platform to underscore that coal would continue to play a major role in the country’s energy generation.

“We want to modernize Eskom so that Eskom can operate better, so that Eskom can be in line with new technologies, in line with modern times. Eskom must be able to compete with other electricity-generating companies around the world.

“Already we are number four with Medupi. We have got to stay up there and be able to operate at the same level as others,” he said. 

The President pointed out that while South Africa was the biggest energy producer on the continent, this had come at a huge financial cost. 

“One of the biggest challenges is the debt that we have had to build Medupi and Kusile. In building these power stations, we have had to go and borrow a lot of money and today Eskom owes over R400 billion, which is a debt that the government has to carry,” he said. 

Because of that debt and other factors, the country’s economy has suffered the consequences. 

“But we are addressing this problem. The government has decided that we are going to continue to support Eskom. We aren’t going to let Eskom go down. Eskom is too important, we are going to support Eskom, even though we have got a huge debt,” he said. 

The President saluted the workers for contributing to the work at Medupi. 

“What is important is to see all of you who have been involved in building this power station. The power station that we are building is already the fourth biggest in the world. And you can be proud that you have managed to build a mighty power station that is recognized all over the world.

“We say thank you to you.”

(With Inputs from South African Government Press Release)