Unbundling Eskom – a silver or lead bullet?
The recent plan by the government of South Africa to unbundle the state electricity provider into three arms – Generation, Transmission and Distribution – has raised various questions. One of the more important question pertains to how the R400 billion debt will influence the unbundling. This article draws on international experiences as a way of preempting which outcomes (both negative and positive) the unbundling will result in, taking into account Eskom’s performance over time. While our analysis is not definitive, it does infer that in order to minimise the negative externalities, and maximise the positive gains from unbundling, there is need for government to have a well-considered action plan that balances the interests of the private and public sector.