Ramaphosa Delays Eskom Grid Spinoff Report to End-June as Transmission Unit Drives Earnings
Updated
Updated · Bloomberg · Jun 10
Ramaphosa Delays Eskom Grid Spinoff Report to End-June as Transmission Unit Drives Earnings
3 articles · Updated · Bloomberg · Jun 10
Summary
End-June is the new target for a task-team report on creating an independent Transmission System Operator, after President Cyril Ramaphosa said the Eskom unbundling review missed its earlier deadline by weeks.
Eskom’s planned split into generation, distribution and transmission units is drawing credit concerns because the transmission business contributes a major share of the utility’s earnings, according to a bondholder and a ratings agency.
The unbundling is meant to open South Africa’s power grid to electricity trading and more private generation, but repeated delays have slowed a restructuring central to Eskom’s long-running overhaul.
For investors, the key risk is that separating out the strongest earnings stream could leave the remaining Eskom businesses with a weaker risk profile even as the state pushes ahead with reform.