South Africa's Eskom faces formidable reform tests

Significance

The appointment follows Minister of Public Enterprises Pravin Gordhan's reconstitution of the Eskom board in January, aimed at restoring credible governance to the utility, which has been plagued by corruption allegations and a liquidity crisis. Hadebe is the twelfth acting or permanent head of Eskom in the last decade.

Impacts

• Partial reforms to state-owned enterprises (SOEs) are unlikely to be sufficient for rating agency upgrades later this year.
• ANC efforts to tone down proposed controversial land reform measures, by avoiding constitutional amendment, may partially placate investors.
• Proposed tariff hikes by Eskom will face opposition from opposition parties, trade unions and industry groups.