South Africa’s Eskom may miss a government target to split into three separate units by 2022 due to legal processes, its chief executive told lawmakers on Wednesday, a move which could slow a restructuring vital to dealing with its huge debt pile.
President Cyril Ramaphosa last year said the cash-strapped firm, which provides more than 80% of the country’s electricity, would separate to improve operational efficiency and help manage its crippling 450 billion rand ($26.64 billion) of debt.
Chief Executive Andre de Ruyter said the first phase to divide the huge business into three subsidiaries – transmission, generation and distribution – operating under Eskom Holdings had progressed well, with thousands of staff already moved internally and divisional executives appointed.
But there were legal processes outside its control.
“Legal separation is a complicated process,” he said.
“Some of the timelines in the roadmap … have been quite aggressive and we have targeted some slightly relaxed timelines but we are managing this very closely.”
He did not say when the unbundling process would conclude and the Eskom presentation said dates were to be confirmed.
By the end of March this year, De Ruyter said Eskom had set up power purchase and energy supply agreements and was running an electricity market internally to simulate what would happen once separation was finalised.
“We have achieved most of our targets,” De Ruyter said.