Say goodbye to Eskom as you know it

President Cyril Rampahosa said Eskom will be fully unbundled, which would end the state-owned utility’s century-old monopoly over electricity in South Africa.

This announcement was made in the President’s State of the Nation Address (SONA), delivered on Thursday, 12 February.

In this address, Ramaphosa announced that Eskom’s transmission assets will be moved out of the utility.

“We are restructuring Eskom and establishing a fully independent state-owned transmission entity,” the President said.

“This entity will have ownership and control of transmission assets and be responsible for operating the electricity market.”

In addition, the President announced the establishment of a dedicated task team under the National Energy Crisis Committee.

This committee, he said, would address various issues relating to the restructuring process, including clear timeframes for its phased implementation. “It will report to me within three months,” he added.

“In addition, we will this year commence the first round of independent transmission projects to enable private investment in expanding our national grid.”

“We will work in each province to address transformer overloading, illegal connections and equipment failure with the objective of eradicating load reduction by next year.”

The President said the government is committed to “the path that we have embarked on to modernise our energy system”.

Ramaphosa’s announcement comes after Electricity Minister Kgosientsho Ramokgopa recently marked a significant milestone in South Africa’s electricity reform process by officially approving Eskom’s updated unbundling strategy in mid-December 2025.

Eskom’s unbundling is considered a critical step in establishing a free and open electricity market in South Africa, as it creates a more level playing field where all generators have equal access to the grid.

Under Eskom’s new structure, a holding company called NewCo will operate with three subsidiaries that function independently –

• Generation: Eskom Holdings Generation (current Eskom)
• Transmission: National Transmission Company of South Africa (NTCSA)
• Distribution: National Electricity Distribution Company of South Africa (NEDCSA)

In addition, a Transmission System Operator (TSO) will be spun out as a completely independent state-owned company, separate from the Eskom Group. 

At the same time, the NTCSA will continue to own, expand and maintain the transmission grid as a subsidiary of Eskom Holdings.

Eskom’s unbundling is regulated by the Electricity Regulation Amendment Act (ERAA), which mandates the creation of a fully independent TSO within five years.

However, the legislation stops short of spinning the NTCSA itself out from Eskom at this time.

This has seen some energy experts raise concerns about the NTSCA’s ability to raise funding to expand South Africa’s national grid.

Eskom has ambitious plans to expand South Africa’s electricity grid by installing 14,000 kilometres of transmission lines over the next decade, at a cost of R440 billion.

The NTCSA works with the Department of Electricity and Energy and the Independent Power Producer Office to implement the Independent Transmission Programme (ITP), which helps in fast-tracking the infrastructure rollout.

It is considered a critical step in creating a free, open market for electricity in South Africa, by allowing a greater number of private market players to connect to and wheel energy on the national grid.

However, experts have warned that the NTSCA’s current structure – a subsidiary of Eskom rather than a fully independent entity – could significantly impact its ability to raise funding for ITPs.

This is because operating as a subsidiary means the NTSCA would not have its own balance sheet, which could make attracting investment far more difficult, threatening the pace of reform progress.

Therefore, Ramaphosa’s SONA announcement that Eskom’s transmission assets will be owned by a “fully independent state-owned transmission entity” is significant, as it signals a pivot to full separation, running counter to the plan Ramokgopa approved in December 2025.

Business Leadership South Africa (BLSA) commented on this development following the SONA, saying the President made it clear that a fully independent TSO will be established, and it will have ownership and full control of transmission assets.

“This clearly asserts the government’s position on the Eskom unbundling and the role and independence of the Transmission System Operator, which would be effectively independent from Eskom Holdings,” the group said.

“The President’s statement confirms the agreed process and as set out in the relevant legislation, and he said a task team under Necom would address the issue, to report back in three months.”

“This issue has caused major concern, with international investors and local business leaders starting to question the government’s commitment to the reform programme,” said BLSA CEO Busisiwe Mavuso. “Certainty is important, and we are encouraged by President Ramaphosa’s comments.”