Roles of electricity and public enterprises ministries defined

President Cyril Ramaphosa has approved a memorandum of understanding (MOU) entered into by public enterprises minister Pravin Gordhan and electricity minister Kgosientsho Ramokgopa to better clarify their respective responsibilities with respect to Eskom and the resolution of the electricity crisis.

The agreement states the electricity minister’s role is to:

• Focus full-time on all aspects of the electricity crisis and the work of the National Energy Crisis Committee.
• Exercise authority over the Eskom board and management on ending load-shedding and ensure the Energy Action Plan is implemented without delay.
• Improve generation capacity and the purchase of additional capacity.
• Oversee implementation of the Eskom Generation Recovery Plan.
• Ensure the generation fleet performs optimally and results in security of supply and low level of load-shedding.
• Ensure matters dealing with transmission are dealt with, including the issuing of the requests for proposals and/or requests for information for financing of new transmission lines.
• Develop and agree on financing models and options for transmission together with National Treasury and the Presidency.

The MOU takes into account the Eskom memorandum of incorporation, which makes it obligatory to inform the public enterprises minister of critical decisions in this respect.

The MOU stipulates the public enterprises minister will:

• Remain the shareholder representative of Eskom.
• Support and assist the electricity minister in his interactions with the board by incorporating the responsibilities of the electricity minister listed in the MOU in the execution of his role as shareholder, in line with the Eskom Shareholder Compact, and inserting the obligations of the board in this regard into the Board Performance Evaluation Framework.
• Steer the restructuring of Eskom in line with the Eskom Roadmap.
• Ensure the establishment and operationalisation of the transmission company.
• Lay the basis for the restructuring of Eskom arising from the Electricity Regulation Act Amendment Bill.
• Oversee the implementation of the just energy transition strategy as provided for in the Shareholder Compact.

Commenting on the MOU, Ramaphosa said: “While significant progress has been made in reducing the severity of load-shedding, much work still needs to be done to guarantee a secure supply of electricity. The collaborative approach outlined in the memorandum of understanding will further strengthen Eskom’s efforts to resolve the electricity crisis.

“The ministers will work together more closely and with their respective responsibilities clearly outlined to ensure the effective implementation of the Energy Action Plan.”

The arrangement will be operational until the end of the current administration.

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