The IIF said that domestic analysts had become more pessimistic about Eskom's financial woes after the utility’s leadership indicated it would need additional financial support above the annual R23billion allocated to it in the Budget speech.
IIF associate economist Gregory Basile said discussions with Eskom and the National Treasury had failed to give an indication of a clearly defined plan to move forward with the restructuring.
“As a first step, to have a clarity of Eskom's restructuring plan, a chief reorganisation officer will need to be appointed, who will then likely unveil plans and a timeline for splitting Eskom into three subsidiaries,” Basile said.
“Although there seems to be widespread agreement that Eskom's restructuring should introduce a shift toward more private sector participation, it is also expected that such a shift will not be a straightforward or politically easy process.”
The IIF further warned that while analysts expected an announcement about Eskom's restructuring plan after the May 8 elections - it believed that the plans would likely fall short of market expectations, particularly on the utility’s wage bill.
President Cyril Ramaphosa announced early this year that Eskom would be split into three separate entities responsible for generation, transmission and distribution under Eskom Holdings.
South Africa's economy depends on electricity produced by Eskom, primarily from its coal-based generation plants, nuclear power station and some hydro power and a small percentage of renewables.
The embattled power utility's operational and financial challenges saw it implementing stage 4 load shedding last month.
A few days later, Eskom chairperson Jabu Mabuza and Public Enterprises Minister Pravin Gordhan said that load shedding would be avoided or at worst stage 1 would be implemented over the coming winter months.
The two said Eskom planned to increase supply at its power plants and to ensure proper maintenance and increase diesel supply.
Goldman Sachs chief executive for sub-Saharan Africa Colin Coleman in a Future for South Africa report said he did not favour the unbundling of Eskom.
“We have a crisis that cannot wait three or four years of market restructuring.
"As we've seen from overseas markets, you need real transactional capabilities to unbundle even less complicated structures than Eskom successfully,” Coleman said.
The IFF said policymakers were concerned about potential strikes across the country in the event of an aggressive move to reduce Eskom’s wage bill and to procure more renewables.
Energy expert Tobias Bischof-Niemz said the transition from coal to renewables would take years and that there was time to shift jobs from coal to renewables through reskilling programmes.
“To appease labour, many of the jobs in coal can be replicated in green energy - mechanical, health and safety, engineering, for example.
"To bring coal mine owners on board, perhaps we should be open to the idea of giving them preferred access to equity in large renewable projects,” Bischof-Niemz said.