As part of SEIFSA’s lobbying and advocacy initiatives a delegation from SEIFSA comprising Senior Executives, CEOs and the Office (L Trentini and T Chibanguza, SEIFSA CEO and COO respectively), met with the Group Chief Executive Officer of Eskom, Mr Andre de Ruyter on the 25th of April 2022. In attendance from Eskom were Mr Monde Bala: Group Executive Distribution and Nkosana Ntlekeni: Key Accounts Executive Manager.

The objectives for requesting the meeting towards the end of 2021 had been to open a channel of communication and on-going dialogue with Eskom with a view to identifying strategic initiatives that SEIFSA on behalf of its affiliated membership and Eskom, can work on collaboratively in contributing to resolving the challenges experienced in the energy supply industry (ESI).

To this end, the following agenda points were submitted to Eskom in advance of the meeting in order to guide the discussion:

  • Discussion on Eskom’s long term strategic vision and plans on the following:
  • Maintenance (preventative and unplanned outages);
  • Staff costs; and
  • Cost of electricity (price path).
  • Discussion on Eskom’s long-term plans on accelerating alternative energy sources onto the national grid.
  • Discussion on the feasibility of by-passing municipalities and companies paying their electricity bill direct to Eskom.
  • Ongoing and further collaboration between Eskom and SEIFSA

This brief note highlights some of the key aspects that emerged out of the meeting

  • Eskom outlined the precarious state of the national grid and the origins of the current challenges, which include a lack of historic maintenance and delays to building new generation capacity. While building the Medupi and Kusile power stations, the organisation ran its generation capacity very hard, measured by the energy utilisation factor, while simultaneously neglecting maintenance. This, we were advised, has resulted in the long-term deterioration of the existing generation fleet. In addition, Eskom is struggling with on-going technical build problems at Medupi and Kusile, resulting in a situation where the power stations that were meant to relieve supply shortages cannot be fully relied on as yet, to ease the supply deficit.
  • Maintenance is currently at 12%-13%, much lower than what Eskom would want it to be. However, a careful balance needs to be struck between planned maintenance and supplying electricity to the economy, against the backdrop of the poor state of the national grid.
  • The limitations to resolving the challenges include, a lack of:
  • money: to adequately finance the maintenance program to the extent that it is required;
  • time: a lack of head-room from a generation capacity perspective to remove units from production while at the same time supplying electricity to the economy; and
  • skills: which have been lost over the years constraining the ability for Eskom to resolve the challenges facing the organisation.
  • Persistent and endemic corruption, which continues to plagues the organisation. This in itself was framed as one of the key constraints to resolving the challenges of the organisation.


  • Greater private sector investment into electricity generation capacity was identified as a key enabler to resolving the electricity supply challenge. Eskom does not see its future role as being one where it will be the primary source of new large scale generation capacity (its balance sheet simply does not permit this).
  • The unbundling of Eskom with a dedicated transmission company that will act as a system market operator, to facilitate buying and selling of electricity between electricity producers and end customers is seen as a key enabler to bringing on private sector investment. Eskom indicated that it is in the process of setting up the electricity trading platform.
  • It was mentioned that the electricity tariffs that could potentially be achieved through this trading platform could be market determined, which would go a long-way towards controlling the pace and extent of tariff increases into the future.
  • Eskom indicated that these unfolding processes will open business opportunities in the economy. Eskom intends to retire 22 GW of coal fired generation capacity by 2035. This, it was stressed, will presents opportunities to convert this capacity to gas, an important enabler toward a just energy transition. Greater solar and wind capacity will also need to be developed to compensate for retired coal capacity. The metals and engineering sector it was mentioned could set to benefit from these developments, along with other sectors of the economy.
  • Eskom will be embarking on an 8000 km build program to strengthen and grow the transmission network to allow independent power producers access to the grid, would again presents opportunities for the sector and the economy.

Areas of collaboration between Eskom and SEIFSA

  • On the opportunities that are unfolding from the developments in the electricity supply industry, a significant amount of effort needs to be invested in policy formulation on how the country can take full advantage of these opportunities. Localisation, local content, industry development incentives, designation, etc., will need to be explored further to determine decisions that are in the best interest of the sector and the greater economy.
  • Eskom indicated a clear willingness to work with SEIFSA, representing its affiliated membership on these and other matters. This is an important development due to the potential cost implications for Eskom, whilst presenting opportunities to develop nascent industries within the sector and the country.
  • Municipal debt was identified as a massive problem for Eskom (currently growing at R 7.3 billion per annum). Eskom has indicated that organised business organisations should be more involved in aspects relating to municipalities. SEIFSA on behalf of its affiliated membership, Eskom stressed, could play an important role in this regard, given the vast geographical spread of its members across the country’s multiple municipalities.
  • Eskom indicated a willingness to further explore models of direct supply and payment between Eskom and end customers, however, Eskom stressed that any considerations in this regard need to take into account the sustainability of the municipalities. Eskom highlighted that every geographical area of the country is covered by a municipality, and therefore it would be ill-advised to pursue decisions that undermine the sustainability of the municipalities.
  • Grid Access Unit (GAU): Eskom has set up a unit that manages aspects relating to accessing the national electricity grid. Regulated bids, which are facilitated through the Renewable Independent Power Producer Programme (REIPPP), we were advised are now much easier to manage. The challenge faced by the GAU is with unregulated bids, where companies build capacity behind the meter or on a bilateral basis between a customer and IPP. Eskom. Indicated its willingness to work with SEIFSA in consolidating the unregulated bids within the metals and engineering sector.
  • Theft and vandalism of Eskom’s infrastructure was highlighted as amounting to a major problematic area that Eskom continues to dealing with. Eskom suggested that SEIFSA and its membership should consider working with Eskom in the following areas:
  • the development of the specifications of electricity cables to make them less attractive to cable theft; and/or
  • advocating for improving scrap metal regulations to eliminate unscrupulous operators while allowing legitimate businesses to continue to operate.


In closing, the president has been emphasising the importance of attracting investment to SA to boost economic growth. The crisis at Eskom can only diminish the confidence of potential external investors in our economy if they cannot be guaranteed a stable and predictable supply of power.

The parting impression gleamed from today’s session is that the Eskom Group CEO and his Team appear to have the determination to continue to do what must be done, no matter how unpopular. This will unfortunately result in more not less rotational power cuts in the short term hopefully resulting in noticeable improvements in the medium term.

What is not in dispute is Eskom’s position within the SA economy, it is so pivotal that it cannot be allowed to collapse. Power stations will be taken down and maintained for longer than has been the case in the past, new renewable energy capacity must be brought on stream quicker and those responsible for corruption must be rooted out.

SEIFSA on behalf of the affiliated membership looks forward to playing its part.