Gordhan says govt will keep Eskom’s generation after unbundling

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Minister of Public Enterprises Pravin Gordhan told Parliament through a written reply to questions from Members of Parliament that Eskom's Generation Entity would remain completely state-owed function.

Eskom is on the cusp of significant adjustments, following President Cyril Ramaphosa's announcement during his 2019 State of The Nation Address, where he said Eskom would be unbundled into three entities to enhance governance and transparency.

Eskom has had more than its fair share of troubles lately with Jabu Mabuza resigning as Eskom chair last week after the power utility failed to honour its commitment that loadshedding would be avoided until 13 January. Ramaphosa has also indicated an intention to make changes to the board.

The question came from Economic Freedom Fighters MP Mzingisi Dlamini, who asked the minister whether the Eskom generation entity would remain 100% state-owned. Dlamini also asked Gordhan to explain his position on the matter and provide details.

"According to the information received from Energy Team the Eskom Generation entity will remain 100% state owned under Eskom Holdings consisting mainly of the current power plant base, which will be separated into a number of feasible smaller generation units," said Gordhan.

Gordhan said each power station will have its own Power Purchase Agreement with predefined, fixed and guaranteed tariffs for energy with the transmission entity.

"Consideration for the creation of multiple generation companies within Eskom Generation is currently under examination with the aim of introducing inter-company competition and drive efficiencies in generation," Gordhan said.

As a political party, the EFF has expressed that it is opposed to the unbundling of Eskom, with the party urging both Eskom CEO Andre de Ruyter and incoming interim chair Malegapuru Makgoba not to facility government's plans to unbundle the utility.

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