Ramokgopa says progress made on Eskom unbundling costs and funding

Electricity and Energy Minister Kgosientsho Ramokgopa says important progress is being made to determine the costs and funding arrangements for unbundling Eskom, including the transfer of transmission assets to an independent operator.

The work involves the Department of Electricity and Energy, the Presidency and National Treasury. Ramokgopa said policy was being finalised to ensure that grid assets are transferred at fair market value.

Speaking to SABC News on the sidelines of the Kgalema Motlanthe Foundation’s annual forum in the Drakensberg, KwaZulu-Natal, the minister described the valuation as a key part of the process.

“Remember, if you want to move the assets, there has to be a fair market value of what that asset BASE looks like on the transmission side,” Ramokgopa said.

He said the value would depend on the findings of an assessment or study. The costs associated with this phase of the restructuring are expected to range from R80 billion to R130 billion.

“So it’s a function of that examination, or if you like to study, it could range anywhere between R80 billion as a low end, and the high end, I think, can go up to 130 billion,” he said.

A plan has been developed to transfer control of South Africa’s power grid to an independent Transmission System Operator (TSO).

The move forms part of the broader restructuring of Eskom, which is being separated into distinct generation, transmission and distribution businesses.

The transmission function is central to the electricity system, carrying power from generating stations across the national grid to distribution networks and major customers.

Establishing an independent operator is intended to place control of the grid at arm’s length from electricity generation and support an open and reliable system.

Before the handover can proceed, the value of the assets and the way the costs will be financed need to be settled. Ramokgopa’s comments indicate that officials are still working through those financial and policy questions.

The estimate of R80 billion to R130 billion relates to the phase discussed by the minister and should not necessarily be read as the full cost of every part of Eskom’s unbundling.

The available report did not provide a detailed breakdown of the estimate, identify the proposed funding sources or set out a date for completing the transfer.

The government’s work on asset valuation and funding is being carried out jointly by the relevant departments and institutions, according to Ramokgopa.

Finalising the policy framework is expected to help determine the terms under which the grid assets would pass to the independent operator.

The transmission reforms are taking place as South Africa continues to reshape its electricity sector.

Further details on the valuation, funding arrangements and timetable for the handover are expected as the policy work progresses.

https://x.com/i/status/2116537970303898101

Karabotobi feedback-opera-news-app@opera.com