President Cyril Ramaphosa has given his approval to a Memorandum of Understanding (MoU) that has been agreed upon by Minister of Public Enterprises Pravin Gordhan and Minister of Electricity Kgosientsho Ramokgopa. The primary objective of the MoU is to establish clear responsibilities for both ministers in relation to Eskom and the resolution of the electricity crisis. This agreement provides a solid foundation for a collaborative approach, allowing the ministers to effectively exercise their assigned powers and fulfill their duties.
The MoU outlines the specific roles and responsibilities of the Minister of Electricity as follows:
– Dedicate full attention to addressing all aspects of the electricity crisis and actively participate in the activities of the National Energy Crisis Committee.
– Exercise authority over the Eskom Board and management to put an end to load shedding and ensure prompt implementation of the Energy Action Plan.
– Enhance generation capacity and facilitate the acquisition of additional capacity.
– Oversee the effective implementation of the Eskom Generation Recovery Plan.
– Ensure optimal performance of the generation fleet, leading to a secure supply of electricity and minimizing the occurrence of load shedding.
– Ensure that matters related to transmission are properly addressed, including the issuance of Requests for Proposals and/or Requests for Information for the financing of new transmission lines.
– Develop and reach agreements on different financing models and options for transmission, in collaboration with the National Treasury and the Presidency.
The Memorandum of Understanding (MoU) takes into consideration the Eskom Memorandum of Incorporation, which requires informing the Minister of Public Enterprises about critical decisions in this regard.
According to the MoU, the Minister of Public Enterprises will:
– Continue to represent the interests of the shareholder in Eskom.
– Support and assist the Minister of Electricity in his interactions with the Board by incorporating the responsibilities outlined in the MoU into his role as a shareholder, in accordance with the Eskom Shareholder Compact. -Additionally, include the obligations of the Board in this matter in the Board Performance Evaluation Framework.
– Lead the restructuring process of Eskom in accordance with the Eskom Roadmap.
To ensure the establishment and functioning of the transmission company, the goal is to lay the foundation for the restructuring of Eskom resulting from the Amendment Bill of the Electricity Regulation Act. Additionally, the oversight of the implementation of the just energy transition strategy, as stipulated in the Shareholder Compact, is also a key focus.
The Memorandum of Understanding (MoU) includes provisions for regular review meetings between the Ministers to address any obstacles that may hinder the implementation of the MoU. Furthermore, the Ministers will also hold regular review meetings with the President.
President Cyril Ramaphosa commented on the MoU, stating, “While we have made significant progress in reducing load shedding, there is still much work to be done in ensuring a reliable electricity supply. The collaborative approach outlined in the Memorandum of Understanding will further strengthen Eskom’s efforts to resolve the electricity crisis.”
He further emphasized, “The Ministers will work closely together, with their respective responsibilities clearly defined, to ensure the effective implementation of the Energy Action Plan.”
The arrangement outlined in the MoU will remain in operation until the current administration’s term comes to an end.
