Electricity and energy minister Kgosientsho Ramokgopa has begun a process to appoint a new Eskom board, with the term of the current board, largely acclaimed for leading the operational turnaround of the business, set to expire at the end of September.
This gives Ramokgopa just under three months to put together a new board, with the minister said to not want to “fix what is not broken”.
Business Day understands that Ramokgopa, who has worked closely with the board to keep the lights on, would prefer to keep the majority of Eskom’s board members, to ensure stability.
However, there will be additions to the board to infuse new ideas and energy in meeting the emerging challenges facing the entity.
“The Eskom board will not have a wholesale change because that will disrupt what is currently working. Maybe about 30% of the current board will not come back to bring in new talent because the challenges the company is facing now are different from when [the board] was appointed,” a source close to the process said.
The current board, chaired by Mteto Nyati, was appointed in September 2022 by the late public enterprises minister Pravin Gordhan. It will now fall on Ramokgopa as a shareholder representative to appoint the new board, after President Cyril Ramaphosa did away with the department of public enterprises.
The board includes Busisiwe Vilakazi, a senior researcher in the field of medical device development at the Council for Scientific and Industrial Research, erstwhile Institute of Internal Auditors SA CEO Claudelle von Eck and electrical engineer Tsakani Mthombeni. All three have PhDs in their areas of expertise.
Chartered accountant Ayanda Mafuleka, erstwhile trade unionist Bheki Ntshalintshali, and nuclear expert Clive le Roux also sit on the board. The rest of the board is made up of chartered accountant Tryphosa Ramano, mechanical engineer Lwazi Goqwana and attorney Leslie Mkhabela.
Nyati, who Ramaphosa initially wanted to replace André de Ruyter as CEO — an offer he said he declined — took over as chair when Mpho Makwana stepped down in 2023.
Some of the skills Ramokgopa is looking for in the new board are energy expertise, alongside renewable, wind and solar expertise. The minister is also on the hunt for board members with climate change, corporate finance and infrastructure and project management experience.
The outgoing board has not been shy to take decisive action to keep the lights on. One of its first actions was to develop a generation operational recovery plan, which commenced in March 2023, and continues to enhance efficiencies for Eskom and deliver a structural shift in fleet performance.
The board also led the appointment of Bheki Nxumalo as head of generation in 2023 and is largely credited with improving the energy availability factors at most of the group’s power stations.
The appointment of Nxumalo was followed a year later by that of Dan Marokane as group CEO, in March 2024. One of the most consequential actions of the Nyati-led Eskom board was to approve the extension of Camden, Hendrina and Grootvlei power stations’ operational lives until 2030.
Previous decommissioning schedules provided for the Grootvlei and Camden power stations to be fully decommissioned by 2025 and Hendrina by 2026.
The new board will have to tackle the runway municipal debt threatening the company’s sustainability. The board will also have to speed up the separation of the distribution business, which has lagged, driven in part by the knock-on effect of delays in the transmission process and other external dependencies.
In his letter to stakeholders published in the utility’s 2024 annual report, Nyati warned that municipal debt, which topped the R100bn mark, risked delaying the unbundling of the utility’s distribution unit, potentially putting the viability of the distribution arm in question.
“The municipal debt challenge has the potential to jeopardise the distribution separation as well as threaten the financial viability and sustainability of the future distribution industry. It is therefore imperative that we address this challenge.”
Choking under its own debt pile of more than R400bn, Eskom received a R254bn relief package from the Treasury in 2023 in a programme that enjoined local government to pay their dues to Eskom.
Last year, Eskom ramped up a comprehensive restructuring process that was started in 2019 to unbundle the vertically integrated utility into three distinct companies of transmission, distribution and generation.
The National Transmission Company SA (NTCSA) began operations a year ago with the objective of raising billions of rand to build 14,000km of new transmission lines in the next decade.
Distribution in SA is currently shared among 165 licensed municipalities and Eskom.
SA’s Transmission Development Plan 2022 requires investment in strengthening the national transmission system over the next 10 years with 14,218km of transmission lines and 122GVA of transformer capacity, equating to 170 transformers.
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