All the suspensive conditions opening the way for the National Transmission Company of South Africa (NTCSA) to be constituted as a separate, distinct and wholly-owned subsidiary of Eskom Holdings have been met, Public Enterprises Minister Pravin Gordhan and Eskom chairperson Mteto Nyati have announced in a joint statement.
Still outstanding, however, is the fulfilment of Companies Act requirements, which meant that the April deadline for the full operationalisation of the NTCSA had been missed. It is anticipated that the NTCSA will commence trading about two months after the fulfilment of these requirements.
The suspensive conditions that have been met include consent from relevant lenders and creditors, the passing of resolutions by the government and the boards of NTCSA and Eskom, as well as the approvals for electricity licences and other regulatory requirements by the National Energy Regulator of South Africa.
“The satisfaction of all the suspensive conditions for the merger agreement between Eskom Holdings and the NTCSA signifies a key development in the government’s pursuit of a restructured, competitive and dynamic electricity market that will usher in a secure and reliable energy future for South Africans,” Gordhan said, while Nyati described the development as a significant milestone in Eskom’s turnaround plan.
“The separation of the transmission division from Eskom will now set the NTCSA on the path for operationalisation once the necessary statutory requirements as per the Companies Act have been concluded,” Nyati added.
The legal separation of Eskom into three entities, namely generation, distribution and transmission, was outlined in the Department of Public Enterprises’ 2019 ‘Roadmap for Eskom in a reformed electricity supply industry’ and is also in line with legislative reforms being introduce through amendments to the Electricity Regulation Act, which was passed by the National Assembly last month.
Gordhan also appointed the inaugural NTCSA board on January 9.
In their statement, Gordhan and Nyati argued that the legal separation of NTCSA would improve business performance, increase lender appetite, and bolster confidence among independent power producers that they would receive fair treatment.