While the partnership between government and business is delivering progress, energy reform at Eskom must be accelerated.
The partnership between business and government is showing results, with one of the positive features of the government of national unity the openness of ministers to engage with business.
Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), says in her weekly newsletter that a better understanding of each other’s needs and objectives can help business and government make progress.
She says the BLSA hosted the Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, who spoke to members about the progress of electricity systems reform.
“The legislative foundation for competitive electricity markets is now in place with the amended Electricity Regulation Act enabling Eskom’s restructuring into separate generation, transmission and distribution entities, breaking the monopoly that constrained our energy future.
“Most significantly, the Independent Transmission Project Office is established and will unlock billions in private transmission investment, starting with 1 164 kilometres of new lines that will release 3 200 MW of stranded renewable capacity in the Northern and Western Cape.”
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Breathing room now for proper implementation of structural changes
Mavuso says with Eskom’s availability factor now stabilising around 65% and additional capacity from the Medupi and Koeberg units coming online, we have breathing room to implement structural changes properly and immediate wins are within reach if we can resolve current bottlenecks.
However, she points out that current grid access disputes are blocking renewable energy projects and preventing energy traders from participating in virtual wheeling, undermining the very competition government and business are trying to create.
In addition, she warns that some exporters face losing EU market access within 12 months due to carbon border adjustments, while we struggle to issue renewable energy certificates quickly enough. Mavuso says the minister’s commitment to have the National Energy Regulator of South Africa’s board chair lead the resolution of grid access rules offers a concrete near-term milestone that can be tracked.
“The underlying challenge is more fundamental. Municipalities owe Eskom over R110 billion, while customers owe municipalities over R370 billion, a payment crisis that threatens system sustainability. Over 95% of municipalities lack qualified electrical engineers, undermining their ability to collect revenue, maintain infrastructure, or plan for growth.
“Our current distribution system is simply not fit for purpose, and numerous interventions to address the culture of non-payment failed to solve the problem.
“As Minister Ramokgopa explained, Eskom must serve as a supplier of last resort for millions of poor South Africans, but this social obligation requires a sustainable financing model that current structures cannot deliver.”
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Distribution Agency Agreements will require coordinated effort
Mavuso says the Distribution Agency Agreements being developed could address this systematically, but implementation will require the kind of coordinated effort that made the energy partnership successful.
She points out that the minister acknowledged the tension between urgency and implementation quality directly, that slow progress risks undermining market sentiment while rushed reforms could trigger system failures.
“His message was clear: government understands the urgency but recognises that getting complex reforms right takes time. It is a difficult balance, but one made easier through the collaborative approach we established.”
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Minister credited business with progress on electricity
Mavuso says what gives her confidence is the way this partnership has evolved. “The minister explicitly credited business as ‘very central in the resolution of the energy question’ and accepted business’ offer to provide embedded skills capacity, from modelling expertise to policy articulation support.
“This is not just consultation but genuine co-creation of solutions where business expertise can help government navigate reform complexity.
“While full transmission system independence may take several years, we can accelerate progress on the immediate priorities of resolving grid access rules, enabling curtailment that could add capacity quickly and developing the municipal engineering capacity that underpins system sustainability.
“These are concrete areas where business skills and government authority can combine for rapid impact. This collaborative model proved successful across government, from home affairs to basic education. As government focuses increasingly on local government delivery, we are ready to contribute capacity and insight where it is most needed.”
She says she is optimistic that the momentum can be maintained.
“Minister Ramokgopa’s detailed engagement demonstrates how business is now viewed as a genuine partner in solving complex policy challenges. The foundation is solid, the partnership is proven, and the pathway is clear, even if the timeline tests our collective patience.”