The Presidency has rebuked Eskom chair Mteto Nyati after he publicly questioned government plans to transfer the utility’s transmission assets to an independent operator, escalating tensions over how and when the state giant should be unbundled.
Who is saying what
Presidency spokesman Vincent Magwenya on Tuesday warned that authorities were committed to ensuring Eskom did not end up in a worse financial position than at present and underlined that a broad range of stakeholders were engaged in discussions about the unbundling process. The remarks were made in response to comments by Eskom chair Mteto Nyati, who cautioned that transferring transmission assets could trigger change-of-control clauses in lending agreements, create accounting complications and unsettle bondholders.
“It is unfortunate that Mr Nyati creates an impression as if there’s a process that’s underway without the inclusion of Eskom and at the detriment of Eskom,”
The quote above is attributed to Eskom chief executive officer Dan Marokane, as recorded in the published report. Marokane has previously said the unbundling must be handled in a way that is sustainable for the company.
Why it matters
The dispute matters for three interlinked reasons:
- Financial exposure: Lenders and bondholders are watching for any change that could weaken Eskom’s balance sheet or alter creditor protections.
- Sequencing and governance: The timing of separating transmission from generation and distribution will determine how liabilities are allocated and who controls key infrastructure.
- Market structure: The proposed independent transmission system operator would end a century-old Eskom monopoly and open the market to private producers and traders, reshaping electricity markets.
President Cyril Ramaphosa last month backed the establishment of an independent transmission system operator. The Presidency’s intervention this week follows that endorsement and seeks to reassure stakeholders that government-led restructuring will not leave Eskom worse off.
Treasury, advisers and lenders
National Treasury director-general Duncan Pieterse has said advisers will be appointed in the coming weeks to begin negotiations with Eskom’s lenders about the planned separation of the transmission business. The published report emphasises that this negotiation process will be central to determining how restructuring can proceed without impairing creditors.
| Actor | Role / Concern |
|---|---|
| Presidency | Ensure restructuring does not worsen Eskom’s financial position; coordinate task team |
| Eskom board (Mteto Nyati) | Warned of contractual and accounting risks; concerned about lender reactions |
| Eskom CEO (Dan Marokane) | Insists unbundling must be sustainable for the company |
| National Treasury | To appoint advisers to negotiate with lenders and safeguard creditor protections |
The published report also notes an Eskom Restructuring Task Team that includes representatives from the Presidency, the Treasury, the Department of Electricity and Energy, Eskom and the planned National Transmission Company.
Political and economic consequences
The exchange exposes the reality of "horse-trading" that accompanies complex public-sector reforms. Whoever wins the argument over sequencing will affect:
- Who assumes which liabilities and the size of the residual Eskom balance sheet.
- How investor confidence in Eskom—and by extension South Africa’s sovereign risk perception—evolves in the near term.
- How quickly private participants can enter the market and whether competition will lower costs and improve supply reliability.
For Eskom, the immediate risk is that public disagreement unsettles creditors and raises borrowing costs or tightens covenants. For government, the challenge is to demonstrate a credible path to reform that does not trigger legal or financial blowback. The appointment of advisers by Treasury will be the next critical step to translate political intent into legally robust solutions acceptable to lenders.
As the matter stands, the public rebuke of the Eskom chair signals a Presidency prepared to assert control over the narrative and process. Whether that will calm markets or deepen boardroom-government mistrust will depend on how transparently and swiftly the Treasury’s negotiations with creditors proceed.
