In October 2006 Cabinet approved the proposal to create six regional electricity distributors (REDs).

These REDs are to be established as public entities, accountable to the Department of Minerals and Energy. Electricity Distribution Industry Holdings (Pty) Limited is implementing government’s restructuring policy. The critical next steps include the finalisation of outstanding policy matters and the drafting of enabling legislation.

Eskom completed the ring-fencing of its operating units in the prior years, in preparation for the RED formation. Any further internal preparation is dependent on the resolution of national policy matters.

In order to minimise any risk to Eskom and the industry, we have identified, and made transparent, a number of key enablers; for example, compensation for transfer of assets and the impact on the Eskom credit rating. Through national and regional participative structures, Eskom is interacting with key stakeholders to assist with related matters where required.