- The World Bank, a key strategic creditor of Eskom and the largest multilateral development bank, has granted its consent to the proposed legal separation of the Transmission Division from Eskom Holdings SOC Ltd (Eskom) to the National Transmission Company South Africa (SOC) Ltd (NTCSA).
- The unbundling of the transmission division from Eskom was first announced in February 2019 but its implementation has been hampered by parent debt covenants. Read more
“The World Bank’s consent marks a significant milestone in advancing our turnaround plan and contributing towards a sustainable resolution of the country’s energy crisis. It is subject to certain conditions, e.g., confirmation that all the necessary suspensive conditions required to operationalise NTCSA have been met. With the NTCSA having obtained licences for the operation of a transmission facility, as well as an electricity Trading and an Import/Export licence from the National Energy Regulator of South Africa (Nersa), obtaining the remaining financial creditor consents is one of the final outstanding conditions to the implementation of the legal separation of Transmission. We are hopeful that the remaining consents will be granted as soon as possible so that we can finalise this process,” said Eskom’s Acting Group Chief Executive, Calib Cassim.
The legal separation of Transmission is a strategic objective and key aspect of Eskom’s Turnaround Plan envisaged in the Department of Public Enterprises’ “Roadmap for Eskom in a reformed electricity supply industry.” Furthermore, it is essential to allow much-needed new grid access, to encourage investment in the generation sector, and through that help the country improve its security of supply.
The World Bank also recently approved a USD1 billion Development Policy Loan for South Africa. This substantial financial support demonstrates the World Bank’s broader commitment to assisting the country and Eskom in promoting long-term energy security.
Author: Bryan Groenendaal
