By 
JOHANNESBURG — South Africa is taking a definitive step toward reshaping its energy landscape as the Eskom Restructuring Task Team (ERTT) accelerates plans to establish a fully independent, state-owned Transmission System Operator (TSO). Announced by President Cyril Ramaphosa during his 2026 State of the Nation Address, the dedicated task team is charged with carving out a separate entity to own and control the nation’s transmission assets and oversee its future electricity market.
The structural unbundling marks a critical milestone in the government’s strategy to introduce competition, foster long-term energy security, and drive down electricity costs for South Africans.
A Shift Toward Global Energy Standards
South Africa’s transition aligns it with global energy trends, as more than 90 countries have already restructured their electricity sectors to establish competitive wholesale power markets. International best practice demonstrates that unbundling transmission and system operations from dominant power generation companies eliminates real or perceived conflicts of interest. This independence ensures all market participants receive impartial treatment and non-discriminatory access to the national grid.
Currently, the functions of the TSO are being managed by the National Transmission Company South Africa (NTCSA), an Eskom subsidiary established in July 2024. Under the Electricity Regulation Act (ERA), the government has mandated the final establishment of the fully independent TSO by no later than December 31, 2029.
Timeline Extended for Rigorous Design
Chaired by the Director-General of National Treasury, the ERTT is comprised of high-level representatives from the Presidency, National Treasury, the Department of Electricity and Energy, Eskom, and the NTCSA.
While the task team was initially slated to submit its high-level report by the end of May 2026, President Ramaphosa has extended the deadline to the end of June 2026. The extension aims to ensure that the proposed restructuring framework can be meticulously detailed and vetted through relevant governance structures.
“I am encouraged by the speed and diligence with which the task team has taken forward this important task,” President Ramaphosa stated, emphasizing that an independent transmission company is a critical reform required to support a competitive market and deliver sustainable economic power.
The ERTT’s mandate is structured into two clear phases:
- Phase One: Focuses on developing the high-level proposal for the TSO, now tracking toward completion by the end of June 2026.
- Phase Two: Involves delivering a comprehensive, time-bound implementation plan within a subsequent three-month window to finalize the restructuring.
Balancing Reform with Fiscal Stability
As the task team outlines the roadmap for the separate entity, it operates under a strict set of core principles defined by its Terms of Reference. Crucially, the restructuring must safeguard South Africa’s fragile energy security while ensuring the financial health of the state utility.
Key Operational and Financial Guardrails
- Asset Separation: Full ownership of the transmission network and associated assets will be legally separated from Eskom.
- Financial Protection for Eskom: The restructuring must ensure Eskom’s financial position is not worsened, while simultaneously guaranteeing the new TSO is financially viable on its own.
- Capital Attraction: The TSO must be structured to independently raise the massive capital required for infrastructure investment, aligning with the country’s Transmission Development Plan.
- Risk Mitigation: The plan must explicitly avoid any qualified audit opinions for Eskom, the NTCSA, or the incoming TSO, ensuring lender requirements are met to prevent debt defaults.
- Consumer Protection: The transition aims to minimize any adverse impact on the national fiscal position and prevent undue financial burdens from hitting electricity consumers.
Beyond protecting the balance sheets, the ERTT is tasked with navigating the interim transitional period. This includes enforcing measures to guarantee the NTCSA operates with adequate independence and ensuring that the crucial allocation of grid capacity remains entirely impartial before the formal TSO rollout. Ultimately, these reforms are expected to pave the way for successful independent transmission projects (ITPs), introducing much-needed private participation into South Africa’s grid expansion.
