Eskom warns grid reform may jeopardise finances, rattle lenders

South Africa should hold off on transferring assets from Eskom to a separate transmission company until the government addresses risks to the State power utility’s finances and its lenders, according to its chairperson. While Eskom’s board backs the creation of an independent transmission system operator (ITSO) that would oversee the wholesale electricity market and provides fair access to the grid, it only wants the company to have to cede ownership of the transmission infrastructure once key financial hurdles have been cleared, Mteto Nyati said. He warned that the transfer could trigger change-of-control provisions in lending agreements, give rise to accounting complications and unsettle bondholders.

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