Rethinking Eskom: Lessons from electricity sector reform in India and Mexico

The report argues that South Africa should avoid a strict 'standard model' of electricity reform—which emphasizes full unbundling and privatization—in favor of a pragmatic approach that balances economic efficiency with social and environmental priorities. By analyzing India and Mexico, the document finds that unbundling alone does not resolve financial distress or lower prices if tariffs remain regulated below cost. It highlights that while private sector participation via auctions has accelerated renewable energy deployment in India and Mexico, it has also created tensions regarding public ownership. The report recommends that South Africa implement targeted subsidies for the vulnerable and explore community or municipal ownership models to ensure a just transition and successful decarbonization.

• India and Mexico adopted a pragmatic approach to electricity reform rather than strictly following the 'standard model' favored by economists, implementing changes only where they were politically feasible and effective.
• Unbundling the electricity sector without reforming pricing is unlikely to solve financial problems or lower electricity prices, as seen in India and Mexico where regulated pricing below cost led to ongoing financial distress and a need for government assistance.
• Untargeted electricity subsidies in India and Mexico have encouraged wasteful consumption and disproportionately benefited wealthier consumers, leading to unsustainable public budget costs.
• The introduction of competition and private sector participation in generation through auctions in India and Mexico accelerated the deployment of renewable energy, though these projects are predominantly privately owned.
• Opposition to private ownership in South Africa may hinder decarbonization because, in the case studies, the majority of new renewable energy projects were developed and owned by the private sector.
• Data on the impact of electricity reform on employment in India and Mexico is limited, making it difficult to determine if renewable energy job gains offset losses in other sectors or if these new jobs are sufficiently secure.
• Both India and Mexico implemented only partial privatization; while new generation capacity often came from private actors, transmission and distribution remained largely under public ownership.

APA

Geddes, A., Bridle, R., Mostafa, M., Roth, J., Sanchez, L., Garg, V., Scholtz, L., & Fakir, S. (2020). Rethinking Eskom: Lessons from electricity sector reform in India and Mexico. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/rethinking-eskom.pdf

Chicago

Geddes, Anna, Richard Bridle, Mostafa Mostafa, Joachim Roth, Lourdes Sanchez, Vibhuti Garg, Louise Scholtz, and Saliem Fakir. Rethinking Eskom: Lessons from electricity sector reform in India and Mexico. International Institute for Sustainable Development, 2020. https://www.iisd.org/system/files/publications/rethinking-eskom.pdf.

Wikipedia

{{cite report |last1=Geddes |first1=Anna |last2=Bridle |first2=Richard |last3=Mostafa |first3=Mostafa |last4=Roth |first4=Joachim |last5=Sanchez |first5=Lourdes |last6=Garg |first6=Vibhuti |last7=Scholtz |first7=Louise |last8=Fakir |first8=Saliem |title=Rethinking Eskom: Lessons from electricity sector reform in India and Mexico |publisher=International Institute for Sustainable Development |date=March 2020 |url=https://www.iisd.org/system/files/publications/rethinking-eskom.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{geddes2020rethinking, author = {Geddes, Anna and Bridle, Richard and Mostafa, Mostafa and Roth, Joachim and Sanchez, Lourdes and Garg, Vibhuti and Scholtz, Louise and Fakir, Saliem}, title = {{Rethinking Eskom: Lessons from electricity sector reform in India and Mexico}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = mar, url = {https://www.iisd.org/system/files/publications/rethinking-eskom.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }