The National Transmission Company of South Africa (NTCSA), a spin-off from Eskom’s unbundling, is a few months away from coming on stream.
Minister of Public Enterprises Pravin Gordhan and Eskom board chairperson Mteto Nyati yesterday announced the satisfaction of the all the suspensive conditions for the merger agreement between the new entity and Eskom Holdings.
The NTCSA is already an official off-taker of power from independent power producers (IPPs) after the National Energy Regulator of South Africa (Nersa) last month consented to Eskom's application in December to transfer its transmission powers, duties and capacity to the new entity.
In February, Nersa officially published the three licences required for the operationalisation of the NTCSA, having approved their transfer from Eskom in 2023.
The new entity is expected to facilitate efficiency in the distribution of electricity through a focus on network development, increasing public and private investment in the national grid and coordination of all power generated by IPPs.
“The separation of the transmission division from Eskom is a groundbreaking undertaking, and meeting all the suspensive conditions was made possible by the collaborative efforts of all key parties, including government, lenders, and Eskom,” Gordhan and Nyati said in a joint statement.
Nyati described meeting the suspensive conditions as a significant milestone in Eskom’s turnaround plan.
“The separation of the Transmission Division from Eskom will now set the NTCSA on the path for operationalisation once the necessary statutory requirements as per the Companies Act have been concluded,” Nyati said.
A critical step ahead is the fulfilment of the Companies Act requirements, and it is anticipated that the NTCSA will commence trade about two months from the completion of these requirements.
Once all assets, systems, and employees have been transferred to the NTCSA, and trade commences, the NTCSA will be a wholly-owned Eskom Holdings subsidiary.
Gordhan said the development was key in the government’s pursuit of a restructured, competitive and dynamic electricity market that would usher in a secure and reliable energy future.
Eskom is set to be split into generation and distribution divisions into their own companies as envisaged in the 2019 Roadmap.
The primary anticipated benefits of the legal separation of the Transmission division from Eskom are:
– improved business performance through the focused attention of the NTCSA executives on transmission-related matters
– increased lender appetite due to the focused and dedicated scope of the NTCSA business
– increased confidence for IPP generators of fair treatment in a future competitive electricity market.
Gordhan had previously said the transmission development plan identified the new infrastructure that would be required to implement the IRP 2019 and Eskom’s 2035 corporate strategy.
“However, it takes time to establish new transmission infrastructure (especially the building of long lines and sub-stations) mainly due to servitude acquisitions and construction ability challenges,” the minister said.
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