Molefe's successor must be 'clean'

Cape Town – The successor of Eskom CEO Brian Molefe will need to convince financial markets that he or she is not "captured" by any entity, said Jeff Schultz, analyst at BNP Paribas Securities South Africa. 

Speaking to Fin24 by phone following the shock resignation of the power utility boss, Schultz said the question on investors’ lips would probably be who is going to replace Molefe. 

Molefe on Friday afternoon issued a media statement, announcing his intention to step down as Eskom CEO with effect from 1 January 2017. The news came on the back of former Public Protector Thuli Madonsela’s state capture report in which Molefe was implicated. 

In his resignation announcement, Molefe made it clear that his decision was by no means an admission of guilt that he had been “captured by the Gupta family”. According to him, he resigned in the interest of corporate governance at Eskom – one of South Africa’s most crucial state-owned enterprises (SOEs).

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Schultz said Molefe’s decision to step down is likely to worsen matters at Eskom, which has been struggling over the last couple of years “through various forms of corporate governance and leadership issues”. 

“On the face of it Brian Molefe appeared to have stabilised our electricity system quite significantly,” Schultz said, “but we’ve got to remember that in that period a fair amount of renewable energy has come online.” 

In addition, some units from the Medupi coal-fired power station were also synchronised to the electricity grid which has also “eased the pressure”, Schultz said. 

“I’m not sure it (electricity supply stability) is entirely because of one person. It’s rather a whole bunch of factors that have helped to improve the electricity situation in South Africa,” Schultz said.