The city of Johannesburg has signed memorandum of understanding (MOU) with Eskom to ostensibly sell or transfer the distribution of electricity in parts of Soweto, Sandton, Orange Farm, Ivory Park, Diepsloot and surrounding areas.
In terms of the MOU, City Power will conduct its own due diligence study on Eskom’s infrastructure and assets in the areas, however no transaction has been concluded as yet.
In a joint statement, both power utilities say that should an agreement be reached on the discussions, the parties will seek the requisite regulatory approvals and give the affected customers an opportunity to contribute to a settlement in a public participation process
“The due diligence study will consider, among others, the state and value of the infrastructure that would eventually be sold to City Power, the outstanding debt owed by customers to Eskom, and other corporate information that will be material to an eventual agreement.”
Among the regulators from whom approvals are required are the National Energy Regulator of South Africa (Nersa), National Treasury, and the Mineral Resources and Energy Department.