Eskom expects the remaining suspensive conditions required for the operationalisation of the National Transmission Company South Africa (NTCSA) to be met by the end of its current financial year and for the entity to commence trading from the start of the new financial year, which begins on April 1.

Commenting on the decision of the National Energy Regulator of South Africa (Nersa) to approve, on September 14, the two additional licence applications required for the independent operation of the NTCSA, Eskom said the approvals marked “a significant milestone in the legal separation process of the Transmission Division”.

The Energy Regulator, which is Nersa’s highest decision-making body approved a five-year trading licence and an import and export licence, having already approved the transfer from Eskom to the NTCSA of the 25-year transmission licence in July.

The State-owned utility added that the NTCSA’s operationalisation was also subject to the satisfaction of suspensive conditions, which include, but are not limited to: 

• Eskom obtaining all applicable lenders consent;
• The appointment of the NTCSA board;
• Nersa’s concurrence on the Department of Mineral Resources and Energy’s buyer assignment of NTCSA and related activities to be concluded by government; and
• The fulfilment of outstanding legal requirements, on which Eskom did not elaborate.

“Eskom is projected to finalise all activities by the end of quarter four of the current financial year and commence trading in the new financial year,” the utility said in response to an Engineering News enquiry.

NTCSA will be a wholly owned subsidiary of Eskom Holdings and will be the first unbundled entity, with work also under way to separate the generation and distribution division.

In his separate response to the licence approvals, Public Enterprises Minister Pravin Gordhan said the five-year trading licence empowered NTCSA to buy and sell electricity from Eskom power stations, as well as independent power producers.

The approval of the import and export licence, meanwhile, would facilitate electricity trade conducted through the Southern African Power Pool, as well as wheeling on behalf of cross-border utilities.

Gordhan also confirmed that the NTCSA would operate the transmission system and perform the roles of transmission network service provider, system operator, transmission system planner, and Grid Code secretariat.

He did not provide any update on the appointment of the board, however.