Eskom to fall under SA Energy Department

By Paul Burkhardt and Antony Sguazzin

South African President Cyril Ramaphosa said the energy department will take over responsibility for overseeing state utility Eskom Holdings SOC Ltd., which has been failing to meet the nation’s power demand since 2008.

The change will be in line with a resolution adopted by the governing African National Congress at its national conference last week, which specified that state companies operating in specific economic sectors should be overseen by the relevant government departments. That could potentially signal a dissolution of the Department of Public Enterprises, which oversees Eskom, logistics company Transnet SOC Ltd. and several other entities.  

“It is a clear mandate from conference,” Ramaphosa told reporters at a media event in Johannesburg on Monday. “The resolution will be implemented,” and the government will decide how and when it will be done, he said. 

Eskom, which supplies more than 90% of South Africa’s electricity, has been at the epicenter of a national energy crisis, because its old and poorly maintained plants can’t generate adequate power to meet demand. It subjected the country to a record 205 days of rolling blackouts last year, which stymied economic growth and investment. 

The government has already announced plans to split the nearly century-old company into three units and take over part of its debt to try and make it financially sustainable. 

Public Enterprises Minister Pravin Gordhan has prioritized anti-corruption measures at Eskom and defended outgoing Chief Executive Officer Andre De Ruyter. A change in the oversight of the company may raise concerns among some investors as Gwede Mantashe, the energy minister, has been opposed to plans to transition the economy to green energy — even though Ramaphosa advocates doing so — and has been a vocal critic of De Ruyter’s performance. 

Several previous resolutions taken years ago by the ANC are still work in progress, and Ramaphosa warned that the party’s latest policy decisions will take time to implement. 

“Things in government move very slowly, I have learned,” he said. 

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