South Africa’s government will now bear shareholder responsibility for certain state-owned enterprises (SOEs) previously under the Department of Public Enterprises including Eskom, which will be overseen by the Minister of Electricity and Energy following the signing of a proclamation, in terms of Section 97 of the Constitution, by the President on August 26.

This shift is expected to bring more focused leadership and accountability to the power utility, which has long struggled with operational inefficiencies, ageing infrastructure and a massive debt burden.

Presidency spokesperson Vincent Magwenya said, by concentrating Eskom’s oversight within the Ministry of Electricity and Energy, government is aiming to streamline decision-making processes and ensure clearer accountability for the utility's performance.

“With Eskom now under the direct supervision of the Minister of Electricity and Energy, there is an opportunity for more decisive interventions to stabilise the utility and improve its operations,” an industry stakeholder told Energize.

This aligns Eskom closely with national energy policy. The utility’s integration into the ministry is expected to facilitate a more cohesive approach to energy planning, particularly as South Africa transitions to renewable energy sources.

“Eskom’s long-standing issues, including maintenance backlogs and an unsustainable debt load, remain at the forefront of government’s agenda. Focused oversight under the ministry could lead to more targeted efforts to tackle these challenges including possible restructuring of Eskom’s debt and increased investment in critical infrastructure upgrades,” the stakeholder said.

With more direct control of Eskom, the Ministry of Electricity and Energy is better positioned to implement effective strategies.

The reorganisation also boosts public and investor confidence in government’s management of Eskom. “Clearer lines of responsibility and potential for more decisive action may reassure stakeholders that government is committed to resolving the utility’s issues,” the stakeholder added.

The changes come as government prepares to finalise the National State Enterprises Bill aiming to establish a governance framework for SOEs like Eskom. The Bill is expected to outline the exercise of shareholder responsibility across various SOEs and create a national enterprise holding company.