IPPs will be permanent part of unbundled Eskom, says Gordhan

Kendal Power Station. Picture: Eskom website

The minister says Eskom’s major assets are not intended for privatisation once the utility has been unbundled.

Public Enterprises Minister Pravin Gordhan has said that independent power producers (IPPs) will be a permanent part of an unbundled power utility Eskom.

The minister was on Tuesday answering questions from parliamentarians during a session in the National Assembly.

Gordhan said the restructuring process at the power utility was underway and a new business model was being developed, adding that as changes took place at Eskom, the supply of electricity would in the future be more consistent, predictable and reliable.

The minister said IPPs, whether the producers of coal, gas or renewable energy, would be a permanent part “of what we see into the future” of the power utility.

He said over the years, a lot had been learned from the contracts that Eskom had entered into with IPPs.

Gordhan said the utility was “in a fascinating period of transition,” from relying on coal to renewable energy.

The state-owned entity (SOE) would be unbundled to three separate entities, one for generation, another for transmission and another for distribution. Each entity would have its own CEO, management and board.

Gordhan said Eskom’s major assets were not intended for privatisation once the utility had been unbundled.

The minister also told parliamentarians that there were different formulae to addressing the SOE’s R450 billion debt, which would be revealed find due course.

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