Business Leadership SA (BLSA) CEO Busi Mavuso has expressed concern over the repeated delays in launching the South African wholesale electricity market. The market was initially targeted to begin trading with external participants this month, but Mavuso said the deadline is now passing without an update on when full operation can be expected. She hopes the minister will provide clear guidance soon, which will be an important step towards a competitive market.
The wholesale electricity market is a significant structural reform in South Africa's electricity sector, aiming to move away from Eskom's traditional single-buyer model towards a competitive wholesale market. The market is expected to attract private-sector investment, ensure price transparency and affordability, and maintain grid stability. Its rollout was initially targeted for April 1, 2026, but was delayed to the third quarter of 2026 due to regulatory, legal, and operational hurdles.
Mavuso welcomed the reappointment of Mteto Nyati as Eskom chair, citing his role in successfully turning around Eskom's operating performance, which registered a R30 billion profit for the 2026 financial year. She looks forward to working with Nyati and his board to support system improvements, address Eskom's municipal debt predicament of R120 billion owed as of July, and ensure Eskom is fit for a future competitive landscape.
Eskom is being unbundled into three entities responsible for generation, transmission, and distribution as part of South Africa's electricity sector reforms. The unbundling process includes the separation of transmission assets into an independent transmission system operator (Itso), a key requirement for the board. Mavuso recently urged the government to implement the Itso after President Cyril Ramaphosa endorsed the first-phase report of the Eskom restructuring task team.
The National Treasury, through the Development Bank of Southern Africa, called for proposals from advisers to assist with the unbundling process, which will require extensive engagement with Eskom's bondholders. The separation of transmission assets will affect the security bondholders rely on, and it is likely they will need to provide their consent. Mavuso emphasized the Eskom board's key role in the process, which is critical to the wider reform effort.
The department of electricity and energy published the draft electricity pricing policy to support a competitive electricity market, which is due to be finalized by March next year. Mavuso stated that BLSA's focus is on following through with the full electricity reform process agreed upon by the national electricity crisis committee. She offered BLSA's support to Electricity Minister Ramokgopa to ensure the success of Eskom 2.0 within a reformed electricity sector.
Mavuso also discussed the impact of electricity tariff hikes on inflation, which have increased at almost twice the general inflation rate over the last year. She noted that the monetary policy committee's decision to increase interest rates by 25 basis points to 7.25% reflects its view that inflation must be reined in. Mavuso emphasized the importance of credibility in monetary policy and fiscal authorities, particularly with the medium-term budget policy statement approaching.
Key points
- BLSA CEO Busi Mavuso calls for clear timelines on the delayed wholesale electricity market.
- The wholesale electricity market aims to attract private-sector investment and ensure price transparency and affordability.
- Eskom's unbundling into three entities is a cornerstone of South Africa's electricity sector reforms.
