The latest Business Leadership South Africa (BLSA) Reform Tracker Quarterly Review says there has been “concerning backwards movement in the critical electricity sector”, attributing the regression primarily to the revised unbundling plan for Eskom unveiled in December.

While stressing that the “broad trajectory remains” positive for the reforms being monitored by the tracker, BLSA CEO Busisiwe Mavuso said the unbundling strategy represented “a step backwards from the independent transmission system operator model that Operation Vulindlela, the National Energy Crisis Committee and National Treasury have been working towards”.

In December, Electricity and Energy Minister Dr Kgosientsho Ramokgopa endorsed an unbundling strategy whereby the National Transmission Company South Africa (NTCSA) would remain an Eskom Holdings subsidiary and retain the transmission assets instead of these being transferred to the new Transmission System Operator (TSO) being set up outside of Eskom.

This approach has been criticised by electricity commentators and organised business, with Business Unity South Africa CEO Khulekani Mathe having warned in an interview with Engineering News that the plan represents a “major setback” for the reforms under way in the electricity sector.

In addition, the latest quarterly update prepared under the aegis of Operation Vulindlela, which is a joint initiative of the Presidency and the National Treasury, identifies Eskom’s restructuring as a reform area “facing significant challenges” and where intervention is required.

The BLSA Tracker said the electricity sector's score has declined over two consecutive periods, dropping from 73.2 points at end-May 2025 to 71.4 at end-December 2025.

In its associated commentary it stated: “Electricity is emerging as a problem, with the reform area standing out as one of the only ones to have actually moved backwards on the path to completion.

“This is after the Department of Electricity and Energy broke with the approved reform plan and approved a revised unbundling strategy for Eskom that keeps the NTCSA within Eskom, rather than being independent.

“This diverges from the model developed by Operation Vulindlela, the National Economic Development and Labour Council and National Treasury.

“The approved structure will effectively leave the TSO unable to raise capital on its own balance sheet, prolonging grid constraints and deterring investment in renewable generation capacity.

“This is clearly not in the long-term interests of electricity stability and the business environment.”

The commentary also highlighted additional electricity sector challenges, including: the exclusion, due to municipal opposition, of the reticulation sector in the Electricity Regulation Amendment Act that came into effect in January 2025; and a legal challenge launched by Eskom against the national wheeling framework approved by the regulator.

The Tracker monitors 245 reform deliverables across criminal justice, governance and economic categories. Of these, 34 have been completed, 19 have been halted, and 192 remain in progress.

The most recent review states that South Africa's reform programme continues to advance, with the overall reform score rising 23.7% since tracking began in March 2024.