The appointment of a new Eskom board with “credibility, business acumen and experience” has given South African businesses hope that the embattled State-owned entity (SOE) can be salvaged, with a number of organisations lauding Deputy President Cyril Ramaphosa for taking a step in the right direction.

Ramaphosa on Saturday appointed the new Eskom board, led by Telkom chairperson Jabu Mabuza, and recommended that Phakamani Hadebe be appointed interim CEO of the power utility.

The Energy Intensive Users Group of Southern Africa (EIUG) on Monday said Ramaphosa’s instructions to the power utility to also appoint a permanent CEO and CFO expeditiously was welcomed, as was the instruction to deal urgently and decisively with allegations of serious corruption and other acts of impropriety.

“These steps will go a long way to restore customer, investor and stakeholder confidence, and will serve to strengthen security of supply. We look forward to engaging with the new leadership at Eskom and working with them to address the challenges faced by the utility and the transition towards a sustainable energy future.

“We are also encouraged by the announcement of the review into the structure of the electricity industry and remain committed to contributing to this process as key customers,” the EIUG stated.

Meanwhile, North-West University School of Business and Governance economist Professor Raymond Parsons noted that the appointment of the new board broke the mould and sent a positive economic message.

“While there is no quick fix for the long-standing problems at Eskom, decisive leadership and action now sends a strong message about what needs to be urgently done to turn it around.

“It is noteworthy that timelines have been set for the new team to tackle the ailing Eskom, so that success can be assessed. The overall approach also provides a relevant role model for other SOEs that need to be reorganised and where economic efficiency must also be strengthened,” Parsons highlighted.

The South African Chamber Commerce and Industry (Sacci) also welcomed the appointment of the new board. “We hope that under the chairpersonship of Jabu Mabuza, the new board will get on with the urgent, mammoth task of stabilising Eskom and fixing its governance structures and processes to stabilise the corporation,” the chamber said in a statement.

It added that the Eskom board should “speedily start” with the process of identifying and recruiting permanent executive talent. “We encourage the board to look for and find the best talent locally or abroad. Eskom’s challenges require this aspect to be taken very seriously and diligently.”

Also weighing in on the changes at the power utility, private sector bank Investec said the new board cheered the local currency as the utility is seen to risk default.

However, Investec warned that, with Eskom’s looming default, if it could not repay loans falling due in the next few weeks, the country’s public finances were at great risk as government guaranteed Eskom’s debt, but did not have the cash to pay off Eskom’s loans.

“And so, the country could see further substantial credit rating downgrades to the lower tiers of subinvestment grade,” economist Annabel Bishop cautioned.

She added that the utility risked suspension of its bonds by the JSE if its issues were not resolved, which would prevent it from raising debt on the capital markets.

“The seriousness of this risk cannot be underestimated, as it would crush investor confidence and be severely credit negative at a time when the country is on the brink of losing its last investment grade rating from the three key agencies, specifically Moody’s”.

Eskom spokesperson Khulu Phasiwe on Monday revealed that the utility and the National Treasury would approach financial institutions in an effort to raise R20-billion.

Meanwhile, Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said the inclusion of experienced business, finance and engineering leaders would do far more to address the challenges faced by Eskom than any of their predecessors in the past decade.

“There are clear indications that the new board has been tasked to rearrange the operational management team and structures, thereby restoring much-needed efficiency and cost cutting to prevent the Eskom ship from sinking. By replacing the Eskom board, Ramaphosa has fired another salvo into one of Jacob Zuma’s biggest corruption camps,” he noted.

Duvenage commended the appointments and the resumption of the inquiry into alleged State capture at Eskom by the Portfolio Committee on Public Enterprises this week for the contribution they would make to the renewal of Eskom. “We would like to see the new board conduct meetings with known whistleblowers and lost talent, so as to lure them back into the organisation.

“We believe the new board’s biggest challenge is not only to get rid of all those who are implicated in massive corruption but also to ensure that criminal charges are brought against them and the evidence in the Eskom files preserved to use against them,” he said.

These included former CEO Matshela Koko, suspended CFO Anoj Singh, former CEO Brian Molefe, former board chairperson Ben Ngubane and former board member Mark Pamensky, Outa noted.

This sentiment was echoed by Business Leadership South Africa (BLSA) CEO Bonang Mohale, who highlighted that the appointment of the board should not stop efforts to bring the numerous former nonexecutive and executive directors, including Eskom’s most recent interim chairperson Zethembe Khoza, to fully account for their actions in plunging the corporation into its current crisis.

“We hope the current inquiry by the Portfolio Committee on Public Enterprises into Governance Failures at Eskom uncovers all the malfeasance that has gripped Eskom in the last five years.”

He added that the composition of the board, bringing a mix of diverse but specialist skills was necessary to quickly restore stability to the operations and finances of Eskom and shows what is possible when there is political will.

Business Unity South Africa (Busa) CEO Tanya Cohen, meanwhile, said the new board showed intent from government to rid the entity of corruption and mismanagement.

“The financial state of Eskom . . . continues to present a significant risk to the national fiscus and the country’s economy. [We are] working directly with Eskom to resolve some of the key challenges, such as formulating a long-term pricing strategy and creating a sustainable funding model,” said Cohen.

Busa further highlighted that the country did not have the funds to provide limitless financial support to chronically underperforming State-owned enterprises (SOEs).

“Credible plans to restore the balance sheets of the SOEs to a sustainable and viable condition is an absolute priority. Funding shortages need to be addressed as a matter of urgency, through restoring confidence in the SOEs.”