South African President Cyril Ramaphosa, in his 2026 This is not the first time Ramaphosa has used his State of the Nation address to keep South Africa’s electricity reforms on track. In 2021, he raised the cap on private power generation from 1MW to 100MW. Minister Gwede Mantashe at the time admitted that the president had “twisted his arm”.
In 2022, Ramaphosa removed the cap altogether, unleashing a torrent of private investment.
Why did Ramaphosa need to intervene again in 2026?
Many would naturally expect a national electricity transmission company to have transmission assets. But for those who have followed South Africa’s long, zigzag road toward market reforms since it became government policy in the white paper on Energy Policy in 1998, it is less of a surprise.
I was involved in drafting the white paper and the 2019 Eskom roadmap. I worked in the Department of Minerals and Energy, was a regulator at the National Energy Regulator of South Africa for 11 years and subsequently sat on the Eskom board for six years until I resigned in 2024.
If nothing else, Eskom management has a dogged determination in pursuit of their objectives. In this fight, where ideology and serious money are intertwined, it’s difficult to predict the outcome. It’s important because it’s a prelude to bigger fights to come.
Reverse creates alarm
In December 2025, Ramaphosa’s Minister of Electricity and Energy, Kgosientsho Ramokgopa, announced that instead of being unbundled into a fully independent company, the National Transmission Company of South Africa would remain a wholly owned Eskom subsidiary, with its assets staying inside Eskom. Only the System Operator would move outside Eskom.
This announcement was alarming for several reasons:
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The South African Wholesale Electricity Market is meant to commence operations in April 2026. Eskom, as the dominant generator, would have a conflict of interest in a competitive market if it owned both generation and transmission assets.
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It appeared, politically, to reverse an important advance made by the Electricity Regulation Amendment Act, which came into effect in January 2025. The act created the expectation that the National Transmission Company of South Africa would become fully independent outside Eskom within five years.
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After severe electricity shortages between 2008 and 2024 (what Eskom terms “loadshedding”), analysts predict a return to power cuts around 2030 unless more renewable power stations are built in time. There is no shortage of willing investors, but the transmission grid is congested, especially in the western parts of the country where the wind and sunshine are best. The bulk of electricity demand is in the east, so the grid must be strengthened to transport power from west to east.
Ramaphosa predicted in his 2026 State of the Nation address that “by 2030, more than 40% of our energy supply will come from cheap, clean, renewable energy sources”.
Eskom plans to debottleneck the grid, targeting 14 500km of new transmission lines and 133 000 MVA (MegaVolt-Ampere) of additional transformers by 2034 at an estimated cost of US$27.5-billion.
An independent National Transmission Company of South Africa will need assets to borrow against if it is to contribute to grid expansion.
However, both Eskom and the State are effectively broke. The government cannot afford to continue the massive bailouts Eskom has needed to stay afloat over the last decade. Consequently, it must turn to the private sector.
It is planning public-private partnerships to enable private investors to expand the grid. But if Eskom’s transmission assets remain inside Eskom, those investors – as well as prospective investors in new generation capacity – would be less inclined to invest.
Both groups would fear that Eskom, as controller of the transmission assets, would discriminate against them in the emerging competitive market. Both want a level playing field and a fully independent grid to underpin the electricity market. Allowing Eskom to own the grid threatens investment and the market reform trajectory and also raises the spectre of future loadshedding.
Politically, Ramaphosa’s announcement is a public rebuke of his Minister of Electricity and Energy, who appears to have fallen under Eskom’s sway as it seeks to prolong its near-monopoly in the electricity market. Globally, monopolies do not relinquish market power easily.
In effect, Ramaphosa was settling a dispute between Eskom and the faction in his African National Congress that supports a developmental state dominated by State-owned companies, on one hand, and the National Treasury and those who recognise that depending on Eskom to solve the country’s electricity problems is unlikely to end well, on the other.
Ramaphosa went out of his way to say:
We are establishing a level playing field for competition, so that we are never again exposed to the risk of relying on a single supplier to meet our energy needs.
Why do Eskom and Ramokgopa want to keep the transmission assets inside Eskom?
The battle lines
They point to Eskom’s US$25-billion debt and note that lenders provided funds against the security of Eskom’s assets. If those assets shrink by removing the transmission lines, the lenders will object and demand repayment. Eskom would be unable to comply. Lenders with government guarantees would then turn to the government, which would also be unable to repay, leading to financial collapse.
This alarmist view ignores that utilities with debts in many countries have been restructured during market reforms. If they could negotiate solutions with lenders, why can’t Eskom?
Some believe Eskom is using debt as an excuse to retain market power, pointing to its legal challenge against the National Energy Regulator’s decision to grant electricity trading licences to five private traders.
Others believe Eskom is not receiving good financial advice and wonder why the National Treasury is not more forthright, given its extensive work in this area.
Eskom also cites its worry over:
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the need “to take account of the establishment of Eskom Green … proposed new subsidiary to house Eskom’s renewable energy business” and
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the requirement for lender consents on a loan-by-loan basis.
Energy Council of South Africa chief executive James Mackay describes the unbundling framework as a “hot potato,” noting that “timing, risk and ensuring Eskom Generation doesn’t collapse (are) equally important”.
Ramaphosa recognises that difficulties remain:
Given the importance of this restructuring for the broader reform of the electricity sector, I have established a dedicated task team under the National Energy Crisis Committee to address various issues relating to the restructuring process.
It must report to him in three months.
Ramaphosa’s comments in his address prompted Eskom’s probably shortest-ever press release, in which it pledged full support for the task team.
So, it’s not a done deal.
Notably, Eskom does not endorse the president’s announcement. It more likely sees the task team as another platform to advance its views in the ongoing contestation over the path and pace of South Africa’s electricity reforms.
It will be interesting.
Written by Rod Crompton, Visiting Adjunct Professor, African Energy Leadership Centre, Wits Business School, University of the Witwatersrand
This article is republished from The Conversation under a Creative Commons license. Read the original article.
