South Africa has moved forward on most of the ten reform actions needed to complete the shift from an electricity monopoly to a competitive multi-market system, but distribution reform has not advanced at all and cross-border trade remains blocked, according to a six-month progress review by the South African Electricity Traders Association and research firm Krutham.
The review updates Policy to Power, published in February, which set out the minimum decisions required to deliver the market envisaged under the amended Electricity Regulation Act. Cabinet approved publication of a draft electricity sector market transformation position paper in July, gazetted by the Department of Electricity and Energy on 21 August for 30 days of comment. SAETA chairperson Khaya Mbatha described the paper as a first step towards the Cabinet-endorsed roadmap the report called for, though the review notes the roadmap itself is unlikely to be finalised before 2027.
A revised Electricity Pricing Policy was gazetted on 28 August, updating the 2008 policy for Eskom’s unbundling. The department intends to submit a final version for Cabinet approval by the end of March 2027. On Eskom, President Cyril Ramaphosa in July endorsed the Eskom Restructuring Task Team’s phase one report, which found transmission assets can be separated without compromising the utility’s financial sustainability. A three-month implementation plan is now under way, with the National Treasury to appoint a transaction adviser.
| Reform action | Status |
|---|---|
| Cabinet-endorsed reform roadmap | Progress, but slow |
| Electricity Pricing Policy | Progress, but slow |
| Institutional capacity at Nersa and DoEE | Progress, but slow |
| Long-term role for Eskom | Substantial progress |
| Transmission development plan | Progress, but slow |
| Electricity distribution industry reform | No movement |
| Trading rules for bilateral markets | Progress, but slow |
| Wheeling frameworks and grid access | Progress, but slow |
| SAWEM launch with Market Code | Progress, but slow |
| Cross-border electricity trade | No movement |
Transmission remains the binding constraint. The National Transmission Company South Africa built 270.8km of line in 2025/26 against a 423km target. It is seeking R134bn for priority projects out of the R440bn required for the 14,500km set out in the transmission development plan. The final request for proposals under the independent transmission programme is now expected in the fourth quarter, later than the third-quarter target set by Treasury and the department, apparently to align with the credit guarantee vehicle, which still awaits its licence from the Prudential Authority. Seven consortia were prequalified in December.
Distribution is the clear failure. The department and Eskom have prioritised distribution agency agreements over the reform roadmap developed by Necom, which has not been published for consultation. Municipal debt to Eskom has reached R119bn. The restructuring task team has recommended a working group covering municipal debt relief, metro trading services reform, smart meters and the agency agreements.
Market rules are slipping. Nersa has reverted to a less contentious draft of the trading rules and moved consultation from August to September, with finalisation now targeted for the end of October. The deadline on the market code has similarly moved from August to October, with Eskom threatening judicial review over unresolved legal issues. The vesting contracts framework and wholesale tariff methodology both require further technical work, which would push finalisation beyond October and affect the planned opening of the wholesale market to external participants in the second quarter of 2027.
Eskom has published a wheeling and net billing policy removing restrictions on wheeling across indebted municipalities, though constraints tied to voltage, portfolio size and administrative cost remain, and the utility does not accept traders as offtakers when developers apply for grid access. Krutham managing director Peter Attard Montalto said a fragmented approach would create further delays and weaken investor confidence. Companies have continued to acquire trading licences despite the unresolved rules.