South African President Cyril Ramaphosa clashed with the head of state energy company Eskom over the speed of opening the national power grid to private operators, pitting the government’s flagship energy reform against warnings of bondholder shock.
At the heart of the dispute is the transfer of powerline assets to an independent Eskom spinoff to dismantle the utility’s monopoly over the grid and open it to private power generation companies to sell electricity directly to buyers.
Eskom board chair Mteto Nyati urged Pretoria to delay the transfer of $6 billion in physical assets, warning that stripping Eskom of its infrastructure — which generates around 40% of its core earnings — could breach existing loan contracts, giving lenders the right to demand their money back. The presidency said it is negotiating safeguards with bondholders and argued that delays jeopardize investor confidence in energy reform.
South Africa’s energy reforms have attracted billions of dollars in committed private capital, helping to produce enough power for Eskom to end rolling power cuts that have stymied growth in Africa’s largest economy. Eskom, now sitting with surplus energy, has set its sights on data centers as a new source of customers.