During the State of the Nation Address on Thursday President Cyril Ramaphosa made an official announcement that Eskom will be split into three separate entities to deal with generation, transmission and distribution.
The three entities will all operate under Eskom Holdings but the split will isolate the costs generated by each section.
This will mean that Eskom can easily raise funding for it’s different operations.
The first priority is to administer an independent state-owned transmission grid with a systems operator in order to stabilise Eskom’s finances and ensure sustainability.
Eskom poses a great risk to South Africa due to it’s financial crisis and it is extremely important to ensure security of power supply.
Ramaphosa’s aim is to minimise the adverse economic effect on the consumer and taxpayer.
Government will work together with labour, Eskom and all stakeholders during the transition to ensure that the needs of everyone involved are considered.
A nine-point plan which Eskom put together will be implemented in which Eskom will need to reduce it’s costs and revenue will need to be generated through an affordable tariff to the consumer.
Steps will be taken against non-payment by communities in order to reduce outstanding municipal revenue.