South Africa plans sweeping power sector reform as Eskom struggles

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South Africa plans sweeping power sector reform as Eskom struggles
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South Africa unveils plan to split state-owned power firm Eskom

PRETORIA - South Africa plans a sweeping overhaul of its power sector by breaking up loss-making state utility Eskom over the next three years and opening the industry up to more competition, a long-awaited government paper showed on Tuesday.

The paper set out a vision for a restructured electricity supply industry, where Eskom could relinquish its near-monopoly and compete with independent power producers to generate electricity at least cost. Some analysts say that keeping the transmission unit within an Eskom umbrella runs counter to its stated aim of boosting competition as it will undermine the unit’s independence.Public Enterprises Minister Pravin Gordhan said the paper was the beginning of a “protracted process” to foster greater efficiency, transparency and management focus in the sector.

The aim is to change a situation where South Africa is reliant on Eskom’s creaking fleet of mainly coal-fired power stations for more than 90% of its electricity and has rigid rules for power procurement.

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