André Marinus de Ruyter is a South African businessman who in December 2019 was appointed CEO of Eskom, South Africa’s largest state-owned electricity company. But in December 2022, de Ruyter tendered his resignation as CEO after stating that a lack of political support had made his position “untenable.” On the following day at work, he unknowingly drank a cup of coffee that had been laced with cyanide. After surviving the assassination attempt, de Ruyter now works in the US and is a Senior fellow at the Yale Jackson School of Global Affairs. In this interview, he speaks about his tenure at Eskom, political corruption in South Africa, and solving the nation’s ongoing energy crisis.
This transcript has been edited for length and clarity.
Haywood: Could you summarize your career and what has brought you now to Yale and the Jackson School?
De Ruyter: I’ve been working in the energy sector for more than 30 years. I started in coal, I’ve worked in natural gas, I’ve worked in oil, I’ve worked in electricity. I worked in many African countries – Mozambique, Zambia, Malawi, Ethiopia, and Nigeria – and then also lived for a period in China where I led a very large energy project, and I also ran a business in Germany for a while. My really broad range of international experience eventually culminated in my being appointed to the position of Group Chief Executive of Eskom, the South African national power utility. I was in that job for a period of three years. That sounds like a very short time, but it was the longest tenure of my ten predecessors. So it was quite a remarkable achievement in and of itself to stick it out for that long
Eventually, I was confronted with a significant degree of corruption and malfeasance in the energy business there in South Africa. That made it extremely challenging to turn the business around and to implement some of the decarbonization initiatives that I had identified and for which I’d obtained significant financing from the international and multilateral financing communities. I then tendered my resignation. I also wrote a book about my experiences at Eskom, Truth to Power, that has been a bestseller. The Guardian in London has nominated this as one of the top five books by whistleblowers internationally. I was also recently nominated one of the top 100 Most Influential Africans by New African magazine.
I was very happy when the opportunity came along last year for me to share some of my experiences and insights into decarbonization and climate finance with Yale. This opportunity is mainly due to the Jackson School, but also because of the Yale School of the Environment and School of Management, where I am currently lecturing on climate finance with a particular emphasis on developing countries.
Haywood: That’s fantastic. If we can back up to right before you joined Eskom – what drove you to want to take the position as Group Chief Executive, especially when you knew about the high turnover rate among Eskom’s leaders in the past?
De Ruyter: I’ve often described my motivation as a combination of naivety and idealism. I strongly believe in a sense of civic duty: I think that citizens who sit on the sidelines and criticize and complain without being prepared to go out there and be part of the solution to the problems that they’re criticizing, forfeit their right to complain to a certain extent. If you’re not prepared to be part of the solution, if you’re not prepared to roll up your sleeves and get stuck in the mud and sort out what irks you in the society that you live in, then maybe it’s time for you to go look for another country.
So when I received the offer, I thought to myself that, yes, electricity shortfalls, corruption – these are major issues plaguing South Africa. I had been fortunate enough to gain experiences that could be relevant in helping to address these shortfalls. And when the call came to ask whether I would be interested (it wasn’t a job that I applied for I must add) I accepted. I said, I’ll do this because I feel it’s my duty as a South African to do so.
Kushi: I’m curious to learn more about Eskom’s leadership and how appointment to that role works. How did the government decide on you? What do you think the future leaders of Eskom will need to do to turn it around?
De Ruyter: I guess that I was a fairly controversial appointment. For key government and parastatal appointments, of which the Eskom job certainly is one, the ruling party and government typically appoint somebody who is a loyal party member and can be counted upon to toe the party line. I definitely don’t fall into that category as I was a member of a political party thirty years ago, but since then, I’ve had no formal political affiliation, and certainly have not been a supporter of the ruling African National Congress (ANC) party in South Africa. Be that as it may, I ran an industrial company as chief executive, where the chairman was the former Central Bank governor, similar to the chairman of the Federal Reserve in the US. Eventually, this gentleman left to become South Africa’s Minister of Finance. He and I got along really well at a personal level. There was a lot of mutual respect, I have a very high regard for his integrity and intellect. He was instrumental in suggesting me as a potential candidate for the job. Apparently, this was after they had already offered the position to 23 other candidates, who had already turned it down. I was the last man standing.
Darragi: Mr. de Ruyter, the South African government has made several proposals for reforming Eskom. One of them is to divide Escom into three separate entities for generation, transmission, and distribution. Do you think that this proposal is efficient? And if not, what is perhaps another alternative that you propose?
De Ruyter: I think this type of structural utility reform is absolutely critical for the electricity industry in South Africa to move forward. It’s not a particularly novel structural reform; this path has been trodden by, I think at last count, 126 other countries, where generation was separated from the transmission business and from the distribution business. It’s pretty much how the US electricity industry is set up as well, obviously subject to appropriate regulation and oversight to ensure that the environment is protected and that the rights of the consumer are protected, and so forth. In order to attract sufficient private investment in energy, and in particular to the generation sector which is where the biggest demand is for new capital, a disaggregated utility has proven to be a critical enabler in other cases. The old days of a monolithic monopolistic utility that could supply electricity at a rate below the cost of production, to a small minority of people in the country – those days are gone for good in South Africa. And there’s absolutely no way in which that construct can, or should, be resurrected. I’m fully supportive of that structural reform; it’s the right way forward for the utility to go.
Haywood: We’ve been dancing around the topic of the South African energy crisis for a bit here and I just want to make sure we take a step back and ask you, what do you think the root causes of the current energy crisis are and what is the context that led to the current situation?
De Ruyter: I think for students attending the Jackson School this can serve as a bit of a case study, really, as to what happens when there’s a policy failure. So in 1998, the South African government published a white paper, which was essentially a policy document that set out what the objectives are for dealing with the electricity industry going forward. And in that document, a mention was made that Eskom would no longer be allowed to build new generation capacity because the paper said there would instead be reforms to the energy sector that would allow the private sector to come in and build that generation capacity.
Now, building that generation capacity was crucial due to two factors. First, an expected growth in consumption, bearing in mind that the economy was growing and the largely African community that had been disadvantaged in terms of electricity supply, amongst many other things, under the apartheid era, were now being served with electricity connection, so the demand for electricity had suddenly increased substantially. The second element is that it was already anticipated back then that the aging coal fleet would have to be retired and replaced. Any mechanical piece of equipment has a finite age – you don’t see many 50-year-old cars on the road anymore, they all eventually break down and then need to be replaced.
The whole situation is really a classic case study of what happens if ideas are not translated into policies… to achieve the objectives that governments have in mind.
Now, what happened was that the government effectively told Eskom they may not build new power stations but did not follow through on the policies required to enable the private sector and private investments to come in and fill in that gap of electricity demand. As a consequence, the reserve margin that South Africa had available very quickly got eroded by poor performance from the aging fleet, exacerbated by corruption, as well as an increase in demand. And that led to the first incidences of load shedding, which are rotational blackouts imposed on the community from between four to twelve hours per day. Load shedding is quite onerous and disruptive not only to domestic life but also obviously to business and industry. This has now been a feature of the South African landscape for 22 years and counting. The whole situation is really a classic case study of what happens if ideas are not translated into policies that are not translated into legislation and then implemented in order to achieve the objectives that governments have in mind.
Kushi: You mentioned a little bit about corruption in South Africa and Eksom, and it’s something I’ve heard you talk about in interviews before. What do you think made Eskom particularly vulnerable to corruption?
De Ruyter: I think that this has been the result of the change in the nature of Eskom from a standalone power utility that had one objective – to generate, transmit, and supply electricity at the lowest possible cost – to what is known as a state-owned enterprise, run by a board that was appointed by the ruling party. And that created a temptation to appoint people who would be pliable, people who would accede to the wishes of politicians, who wouldn’t have moral qualms about engaging in corrupt practices. That’s exactly what happened. There have been many cases that have gone through the courts here or have been exposed in the media that contained the elements of what’s called state capture, where the resources of the state are abused by politicians in corrupt association with private sector actors, and where these malfeasances then translate into corruption. And you actually create an environment where corruption can thrive, because you allow the normal principles of good corporate governance to be thrown out the window.
Just to prove the hypothesis that I’m putting forward, just about every state-owned enterprise, – and there are over 400 of them in South Africa, some are big and some are small – just about every one of them has been a hotbed of corruption since changing this model. So there are clear structural reasons why corruption got a foot in the door very soon after this change in political oversight and political involvement, or even interference, in running the affairs of state-owned entities.
Haywood: Why do you think corruption in South Africa is so persistent, especially given its broad recognition among the people? Public figures like you have called out corruption, I’m thinking of the recent commission into the subject, the Zondo Commission, which gave a very deep dive into looking at corruption in South Africa. It’s a very acknowledged problem. But what makes it so stubborn?
De Ruyter: You know, one of the spokespersons of the government, Smuts Ngonyama, made a very revealing comment about five, six years ago. He said, “I did not join the struggle [against apartheid] to be poor.” So there is this prevalent notion that access to the levers of power entitles you to access to financial wealth. Of course, one must be very careful. You cannot blame only the politicians, because in every corrupt relationship, there are two parties. There’s a corruptor and a corruptee. I think we absolutely need to acknowledge that private sector actors gleefully participated in the corruption. Some of them were very well-known international names: Deloitte; McKinsey; SAP, the German software company; and ABB, which is a major Swiss company. So it’s a two-way street.
But I do think that the opportunity that people had to abuse the positions of power that they were put in without appropriate checks and balances, and without the right consequence management in terms of successful law enforcement prosecution, followed by exemplary terms of incarceration; in the absence of those normal measures of control, corruption just took over and ran like wildfire. There was a specific focus by the ruling party, the ANC, to reduce the effectiveness of the anti-corruption entity, an independent investigative body called the Scorpions. The Scorpions were disbanded at the insistence of the annual Congress of the ANC which said we can’t have these people prying into our affairs. This was the same conference at which the very effective but fairly unpopular President of the African National Conference, Thabo Mbeki, was unceremoniously defenestrated and replaced by Jacob Zuma. And if you’re familiar with the Zondo report, you’ll know that during the Zuma years, state capture and corruption became completely rampant. This was because the institutions that were supposed to maintain adequate oversight over government procurement practices, which is how funds flow from government to private sector actors, were deliberately dismantled and undermined.
In your studies, you’ve likely already come across a book called Why Nations Fail by Daron Acemoglu and James Robinson. What that book really is about is institutions. Once you undermine institutions, that’s when states fail. Corruption and undermining of institutions has not particularly got anything to do with Africa, per se. The United States also went through periods of rampant corruption and the undermining of institutions. You might argue that’s an inevitable cycle that societies go through. But we certainly are in the middle of fighting corruption in a very challenging and very significant way.
Kushi: What do you think are some strategies that South Africans, whether they be government members or people in the private sector can take to stop corruption?
De Ruyter: One of the big elements that should be implemented is to ensure that there’s adequate transparency in public procurement. Thirty years ago, tenders – bids for providing goods or services to public entities – were opened in public and the numbers were read out in public. Now, of course, some of these tenders are very complicated, they’re very technical, they’re subject to adjustment, and they’re not always easy to compare. But the transparency that is introduced by a public opening of documents, so that there’s no opportunity to “lose” a bid, or there’s no opportunity to quickly adjust the numbers, because it’s opened right there when everybody’s present, and all the bidders can say “yes, that’s the number that I wrote into my document.” That public opening, I believe, is one of the critical steps.
There’s an old saying, ”sunlight is the best disinfectant.” Transparency in any public process is a sine qua non for good clean governance. And unfortunately, the public procurement processes in South Africa are incredibly complicated. They have scoring mechanisms that are based on adjustments for the race, gender, age of the bidders. In that complicated process, of course, the opportunity arises for non-value-adding intermediaries to inject themselves into the process. Also, by the deployment of bribes, brown envelopes, paper bags, cars, and even in a couple of instances, cows that are delivered to farms, people can influence the process in a way that would in a transparent environment not be possible.
Darragi: Mr. de Ruyter, while we are on the topic of transparency, I have seen references by some journalists to an “energy apartheid.” Some allegations have been made that Eskom segregates load shedding based on where you are in South Africa. For instance, townships like Soweto (which has a large black population) have experienced more load shedding than places like Sandton (which is more white). What is your response to those allegations?
De Ruyter: I think you need to distinguish first of all between load shedding, which is a way of managing the demand for electricity in order to allow the available generation capacity to meet the demand. That is done on an equitable basis across the board. There’s absolutely no discrimination. But what has happened in a place like Soweto, for example, is that years ago, at the advent of democracy, some irresponsible politicians went to Soweto and said, as a reward for supporting the ANC, we will absolve you from ever having to pay your electricity accounts. As a consequence, the payment rate in Soweto during my tenure at Eskom was hovering between 13 and 17%. Now, just what happens in the US, if you don’t pay your bill, electricity gets cut off. The utility just comes and disconnects you. But this has nothing to do with race. It’s got everything to do with whether you buy your bill. And the extent to which there is widespread meter tampering, electricity theft, and nonpayment, those feature quite strongly in electricity distribution, and unfortunately, the perception has been created that this has somehow correlated to race, which is not the case at all. In fact, I think Eskom was particularly lenient in still providing electricity in spite of the fact that revenue collection was so poor.
Haywood: Speaking of revenue collection, one of the things we noticed is that South Africa still exports energy to its neighboring countries. Do you think that behavior is incompatible with South Africa resolving its energy crisis? And to what extent do you see solving the South African energy crisis as involving other regional actors?
De Ruyter: South Africa is one of the members of the Southern African Power Pool, which pools electricity supply into one interconnected grid, across countries. Namibia, Botswana, Zimbabwe, Zambia, Mozambique, Eswatini, Lesotho, and obviously South Africa are all members. South Africa dominates the power pool – it generates about 73% of all the electricity that is consumed in the pool. But it is also a significant buyer of electricity from Mozambique, for example. Mozambique has a very large and very successful hydroelectric project called Cahora Bassa and there’s a high voltage direct current line that has been supplying electricity from the north of Mozambique to South Africa for many, many decades. So if we were not a member of the pool, if we did not provide electricity to other countries, and we did not buy electricity, then the shortfall in our own electricity would be even greater.
Now, what needed to be done on this issue was a couple of quite unpopular things which I introduced. I said, first of all, Eskom needs to make a profit on the electricity that it sells and that is a process where we significantly increased the tariffs charged to our neighboring countries. But also we said, like we did with Soweto, well, you actually have to pay for the electricity that we provide you. We went so far as to demand cash upfront from Zimbabwe, which had an extremely poor payment record before we would supply them with electricity because we just had no faith in their ability or their willingness to pay for the electricity offered and supplied. So I think regional integration generally is a positive thing.
We know that Namibia, for example, is going to be investing massively in renewable energy and for South Africa to be able to tap into those resources as part of the Southern African Power Pool makes absolute sense. So I think buying and selling electricity across the region is a good idea and is to be supported.
Kushi: There’s been some talk about South Africa trying to transition away from coal. What proposals are out there for that transition? Do you think that they’re going to work?
De Ruyter: This was one of the main thrusts of my tenure as Group Chief Executive of Eskom is that I very quickly came to the conclusion that we had to produce new generation capacity as quickly as possible. If you compare different technologies, the lowest cost and the quickest to deploy these days are solar and wind energy. Even if you ignore the negative environmental impacts of the externalities imposed on the environment by coal-fired power generation, which you shouldn’t, it still makes perfect sense to roll out wind and solar as quickly as possible. There are technical challenges with the fact that these are variable renewable energy sources, but these can be resolved and certainly only become a critical problem for the grid when you get to a very high penetration of renewable energy sources.
This drive ran into considerable opposition, in particular from the Department of Mineral Resources and Energy, which had a focus on prolonging the life of coal-fired power stations because it had a dual mandate to both promote mining and provide policy direction for the energy industry. The inherent conflict between those two mandates, in addition to the very significant political sway held by heavily unionized coal workers, caused the process to be, pardon the pun, undermined.
That being said, we still made very good progress in our energy transition. We were able to deliver a groundbreaking $8.5 billion Just Energy Transition Partnership agreement, which was signed between the US, UK, France, Germany, the European Union, and South Africa at COP 26 in Glasgow. We were able to secure more than a billion dollars through concessional financing to repurpose and repower a decommissioned coal-fired power station, in order to ensure that the transition to a decarbonized electricity industry would be a just one. This is something that I feel very strongly about: without ensuring that there is social and environmental justice that accompanies the transition, it is highly likely that those kinds of energy transitions will not succeed. They will be held up by interference through the vested interests who have been involved in the coal industry or have made investments in the industry over many decades and have legitimate concerns about the transition’s effects.
South Africa is very fortunate in that it’s got some of the best wind and solar resources in the world. I’m still firmly of the view that in the absence of any sort of likelihood that the government will solve the energy crisis, there will be a de facto liberalization of the electricity sector that will cause the electricity industry in South Africa to decarbonize. Just in the last year, privately distributed energy generation through renewables exceeded the capacity of one major coal-fired power station in South Africa without any incentive or support from the government. So load shedding is forcing people to take matters into their own hands and decarbonize. Whether the government wants to promote that or not is no longer relevant. It’s happening because people need electricity to live their lives.
Haywood: Do you foresee a future in South Africa where the growth of the private sector energy generation and renewable energy push out Eskom or state involvement in energy? Or how do you see that future playing out?
De Ruyter: In the future, I think all of Eskom is going to be very different. As we spoke about the restructuring of Eskom, I think we were going to have an Eskom which will have a very reduced presence in the generation sector, which will be largely operated by the private sector. It will still have a substantial presence in the transmission industry, that’s a natural monopoly – it is infrastructural in nature. Typically, that is the last element of the electricity industry where the state maintains a significant degree of involvement. The distribution parts of the industry, I think, will either go into the hands of private distributors, very much like mobile phone operators, or it will go into the hands of local authorities. So the role of Eskom, as I said earlier, the monolith that was able to meet all of South Africa’s electricity needs, that’s going to change and it’s going to become a much smaller, much more focused business with a significantly smaller presence in generation and distribution.
Kushi: While we’re looking ahead, do you see yourself returning to South Africa in the future? And if not at the moment, what will it take for that to happen?
De Ruyter: I’d love to return to South Africa. It’s still a place that I regard as home. It’s a place that I’m very fond of. I’m fond of the people, I think we’ve absolutely fantastic people who live in the country. So yeah, I absolutely intend to return to South Africa. Much as I appreciate the opportunity of living and working in the US, I do miss South African sunshine and South African wine.
Haywood: I wanted to ask you personally about the circumstances under which you left both Eskom and South Africa. I’ve heard that’s a complicated and fraught story. Can you tell us about that?
De Ruyter: Yeah, it was a very interesting period. On the day that I tendered my resignation to the chairman of the board, I returned to my office and was provided with coffee. That coffee turned out to be laced with poison, a mix of cyanide and insecticide – which by the way is apparently a Russian recipe. I’ve since learned more about poison than I ever wanted to. So I became quite ill. But fortunately, I survived the attempt. I was told by a toxicologist that I was very, very lucky to escape. I won’t go into all the gory details but yes, I made it.
That coffee turned out to be laced with poison, a mix of cyanide and insecticide – which by the way is apparently a Russian recipe. I’ve since learned more about poison than I ever wanted to.
Soon after that, as I was serving my notice period, I started to speak up more openly about the reasons why we have not been able to make as much progress as people wanted to on solving the energy crisis. In particular, I spoke out about some of the vested interests that underpinned corrupt behavior in Eskom: coal theft by organized crime of very, very significant proportions, and to a large extent a supine police force that wasn’t particularly interested in ensuring that there were consequences for these criminal activities. That then led to some considerable pressure on me at that stage. I was driving around in a bulletproof Land Cruiser accompanied by bodyguards due to various threats that I’d received. So life was getting quite interesting. You always watch movies, but once you start living it, it’s not to be recommended.
I decided I’d rather go abroad. This was achieved by some sleight of hand. At that stage, various people were looking for me who wanted to apprehend me and force me to testify and so forth. I’m told they were watching the airport in Johannesburg, so I then hitched a ride on a private jet to Cape Town, got on a plane there, and made my way out of the country.
Haywood: Wow. That is truly remarkable. I can’t imagine how difficult that must have been for you and everyone close to you. How do you manage to stay committed to speaking out against corruption and working to improve South Africa even when there’s all this persecution against you?
De Ruyter: You need to be a bit bloody-minded when it comes to principles relating to honesty and integrity. I’ve often been asked, you know, why? Why did you speak out? And I guess one strategy I could have followed was to just keep my mouth shut, attend all of my farewell parties, and just go off quietly into the sunset. I could have had a very nice retirement and served on a couple of boards, and that would have been the end of the story.
By not speaking out when you see something that is wrong, you become complicit. You become part of the problem, even if you’re not a direct beneficiary of corrupt activity.
But I do think that there is something like principle, there is something like right and wrong. By not speaking out when you see something that is wrong, you become complicit. You become part of the problem, even if you’re not a direct beneficiary of corrupt activity. If you’re aware of it, and you don’t speak out, you are compromised, and you are complicit. And I just thought that the people of South Africa deserve better. They deserve to know why the lights were off for many hours every day. It was not due to people who work hard and try their best, but it was due to a toxic combination (I guess I shouldn’t use that phrase) of poor policy and corrupt and criminal activity.
Kushi: South Africa has an election this year. What are you looking for? What are your hopes?
De Ruyter: One of the frustrations with the South African political environment is that parties have been quite poor about articulating their policies. If you look at the ANC, I think we know what the ANC’s policy agenda is because they’re in government: they publish white papers, they push laws to Parliament, so we know what the policies are. But most, if not all, of the opposition parties define themselves by being opposed to the ANC. So their election strategy, by and large, is to say, please vote for me, because I’m not the ANC, which I find to be a very unsatisfactory approach to canvassing votes from the electorate. Yes, you might not be the ANC, but does that mean that you’re going to be better or worse than the ANC? And if you don’t tell me what your policies are going to be, well, I’m really going to struggle to make that decision
There is a dearth of good policy thinking in South Africa, that is coherent, that is consistent, that hangs together across the various aspects of policy. For example, if you think about energy policy, it’s not only about energy policy, it’s about environmental policy, it’s about fiscal policy, it’s about industrial policy. All of these policies have to hang together and integrate. Sitting in Parliament and shouting at the Minister for not doing his or her job is necessary, I guess, for there is some form of political accountability. But what is your alternative agenda? What I’d be looking for in the selection is a party that articulates policies that I believe have a high degree of successful implementation to address the very significant challenges that South Africa faces.
Haywood: I think we have some time left for a few more questions.
Darragi: If the government chooses to make Eskom a private company, do you think that would help solve its corruption problems? If it’s not owned by the government, would this mean fewer opportunities for corruption and corrupt actors to be in control?
De Ruyter: I think more private involvement in the electricity industry would be beneficial. I think it’s highly unlikely that the current ruling party will privatize Eskom because it’s ideologically opposed to doing so. Part of the ANC’s policy is a very strong preference for significant state control and state involvement in the economy. I don’t think that privatization is likely to happen.
What I do think is that transparent market-based competition will be a good check on corrupt activity in the electricity industry. Once you’ve got monopolies, and you’ve got the coincidence between politics and commercial interests, that’s generally when things go off the rails. But when people have to compete for business, and they are properly regulated, and there’s adequate transparency, things are much better. So, my preferred solution is not so much to privatize Eskom, but it is to enable far more private sector participation in the electricity industry.
Kushi: Do you have any message to the next generation of leaders in South Africa that are looking at this corrupt situation and thinking what hope is there? How are we going to get out of this?
De Ruyter: South Africa is a very interesting country. We seem to have this knack for peering over into the abyss and at the moment when it seems inevitable that we are likely to topple over the edge, we manage to pull back and somehow make it work. This characterized the greatest challenge of all, which was the transition from apartheid to democracy. The transition was fraught with risk and the potential for very, very significant bloodshed and eventually went off largely peacefully, which was a minor miracle at the time.
I still back the resilience and character of the ordinary South African – let’s forget about the politicians – to do the right thing, to do the decent thing, and to pull through. But they need to do so with proper leadership. My appeal would be to the next generation to step up to the plate, do your duty, and take the lead in doing what is right for the country and its people.
This interview was conducted by Nour Darragi, Owen Haywood, and Ty Kushi on January 30, 2024.
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