President Cyril Ramaphosa has announced that Eskom would be divided into three different units in a bid to manage its balance sheet.
Eskom is expected to post a R20.1?billion loss for the financial year to end in March from the R15 billion forecast at its mid-year results as overall expenses widened during the period.
The power utility also has a mounting debt which stands at overR400 billion.
Delivering his second State of the Nation Address (Sona) inParliament, Ramaphosa said that Eskom would need to develop a new business model to ensure the credibility of the turnaround plan and avoid a similar financial crisis in a few years' time.
"To bring credibility to the turnaround and to position SouthAfrica's power sector for the future, we shall immediately embark on a process of establishing three separate entities --Generation, Transmission and Distribution - under Eskom Holdings," Ramaphosa said.
"This will ensure that we isolate costs and give responsibility to each appropriate entity. This will also enable Eskom to be able to raise funding for its various operations much more easily from funders and the market.
"It is imperative that we undertake these measures without delay to stabilise Eskom's finances, ensure the security of electricity supply and establish the basis for long-term sustainability."
Earlier in the week, Ramaphosa told delegates at the Mining Indaba that government would not allow Eskom to fail because it was too big a factor and too important in the country's economy.
- African News Agency (ANA)
