Source: President of South Africa –
During the 2026 State of the Nation Address, President Cyril Ramaphosa announced the establishment of a dedicated task team to oversee the restructuring of Eskom to establish a fully independent, state-owned Transmission System Operator (TSO) that will own and control transmission assets and be responsible for operating the electricity market. This is a crucial step towards enabling competition, and reflects government’s determination to reform South Africa’s electricity sector to achieve long-term energy security and lower electricity costs for all South Africans.
The Eskom Restructuring Task Team (ERTT) has since been established, and includes representatives of the Presidency, National Treasury, the Department of Electricity and Energy, Eskom, and the National Transmission Company South Africa (NTCSA). The task team is chaired by the Director-General of National Treasury, and has made significant progress in preparing for the establishment of the TSO. While the task team was expected to present a high-level report by the end of May 2026, the President has extended this deadline to the end of June 2026, in order to ensure that the proposed approach can be fully detailed and considered through the relevant governance structures.
The President said: “I am encouraged by the speed and diligence with which the task team has taken forward this important task. The establishment of a fully independent transmission company is a critical reform which will support the introduction of a competitive electricity market and ensure a reliable, affordable and sustainable electricity supply to power the economy.”
BACKGROUND NOTE
More than 90 countries have reformed their electricity sectors to establish competitive wholesale electricity markets. Most have unbundled transmission and system operation from the incumbent generator as a crucial part of the reform to ensure that the transmission system operator has no real or perceived conflict of interest and is free from influence or control by any market participant, guaranteeing that all participants are treated impartially in the way that it operates and makes decisions.
The Electricity Regulation Act (ERA) provides for the establishment of the TSO by no later than 31 December 2029. In the interim, the functions of the TSO are carried out by the NTCSA, a subsidiary of Eskom that was established in July 2024.
In line with the commitment made by the President, the Eskom Restructuring Task Team was established at the beginning of March 2026, comprising senior representatives from the Presidency, National Treasury, Department of Energy and Electricity, Eskom and the National Transmission Company South Africa (NTCSA). It is tasked with:
* Developing a detailed proposal and implementation plan for establishing an independent, state-owned TSO separate from Eskom that will assume ownership and control of transmission assets, operate the electricity market, enable transmission investment at scale, and provide non-discriminatory access to the grid.
* Giving consideration to the optimal institutional model for the TSO, drawing on international best practice and ensuring full alignment with the ERA.
* Addressing the measures required to ensure adequate independence of the NTCSA during the period before the TSO is established, and considering the appropriate location of responsibility for the allocation of grid capacity to ensure independent and non-discriminatory treatment of grid users, both during the transitional period and once the TSO is established.
The ERTT is tasked with overseeing the restructuring of Eskom in a manner that fulfils the following core principles, among others, as set out in its Terms of Reference:
* Maintain energy security;
* Ensure full independence of the TSO from all market participants;
* Ensure that ownership of the transmission network and any other assets associated with the statutory functions assigned to the TSO in terms of the ERA is separated from Eskom;
* Ensure that Eskom is not worse off than its current financial position following the restructuring, and that the TSO is financially sustainable;
* Ensure that the TSO is able to raise the funding required for investment in infrastructure in line with the Transmission Development Plan;
* Avoid any qualified audit opinion for Eskom, the NTCSA or the TSO and ensure that that lender requirements are addressed to avoid any default;
* Minimise any impact on South Africa’s fiscal position;
* Prevent any undue financial burden on electricity users; and
* Promote the objectives of electricity market reform, including the successful introduction of independent transmission projects (ITPs).
The work of the ERTT will be undertaken in two phases. The first phase, which is now expected to be completed at the end of June 2026, will focus on the development of a high-level proposal for establishing the TSO. The second phase, which will be completed within a further three months, includes developing a detailed implementation plan with timeframes for completing the restructuring in the manner proposed.
Media enquiries: Vincent Magwenya Spokesperson to President Ramaphosa on media@presidency.gov.za
Issued by: The Presidency
Pretoria