ESKOM AND CITY POWER SIGN MEMORANDUM OF UNDERSTANDING ON POSSIBLE TRANSFER OF JOHANNESBURG ELECTRICITY DISTRIBUTION TO CITY POWER

Eskom and City Power, the electricity company owned by the City of Johannesburg, have signed a memorandum of understanding (MOU) with a view to concluding a transaction in which Eskom would eventually sell or transfer the distribution of electricity in parts of Johannesburg currently supplied by Eskom to City Power.

Kaalfontein, Allandale, Ebony Park (KAE) and Ivory Park are some of the areas in the City of Johannesburg currently supplied by Eskom. The proposal to transfer the distribution of electricity from Eskom to City Power was initially mooted by the Late Executive Mayor, Geoff Makhubo, in his State of the City Adress earlier this year.

If all goes according to plan, the above areas including Soweto, Diepsloot, Orange Farm and Sandton will soon have electricity supplied by City Power. Nearby Rabie Ridge has always been supplied by City Power. Rabie Ridge residents have been complaining about the reliability of the electricity supply for the longest time.

In term of the MOU signed on Thursday, City Power will conduct its own due diligence study on Eskom’s infrastructure and assets in the areas. The due diligence study will consider, among others, the state and value of the infrastructure that will eventually be sold to City Power, the outstanding debt owed by customers to Eskom.

The agreement will be subject to regulatory approval and residents will be given an opportunity to contribute in a public participation process. Approvals are required from THE National Energy Regulator of South Africa (NERSA), National Treasury and the Department of Mineral Resources and Energy.