City Power could control electricity distribution in Joburg

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Johannesburg skyline at sunset. Image of the city of Joburg via Twitter

Eskom and City Power have signed a memorandum of understanding regarding the possible transfer of electricity distribution from Johannesburg to City Power.

South African power company Eskom and Johannesburg-owned power company City Power have signed a memorandum of understanding to complete a transaction in which Eskom would sell or eventually transfer the distribution of electricity. electricity in parts of Johannesburg currently supplied by Eskom to City Power.

It comes a week after the city of Johannesburg signed a power purchase agreement with private utility Kelvin Power Station to add 100 MW of power supply sent to the city.

City Power currently holds the distribution license for the rest of the city of Johannesburg. No deal has yet been concluded, and in terms of regulation, all relevant stakeholders will be part of the decision-making process.

Regarding the MoU, City Power will conduct its own due diligence study on Eskom’s infrastructure and assets in the regions. Among others, the affected areas include parts of Soweto, Sandton, Orange Farm, Ivory Park, Diepsloot and the surrounding areas, in which Eskom currently holds the distribution license.

The due diligence study will examine, among other things, the condition and value of the infrastructure that would eventually be sold to City Power, the unpaid debt of customers to Eskom and other information about the company that will be important to a company. possible agreement.

If an agreement is reached on the discussions, the parties will seek the required regulatory approvals and give affected customers the opportunity to contribute to a settlement through a public participation process. Regulators whose approvals are required include the South African National Energy Regulator (NERSA), the National Treasury, and the Department of Mineral Resources and Energy.

The parties pledged to keep the public and relevant stakeholders informed of the progress of the talks.


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