Eskom's Profitability Ends Eight-Year Loss Streak

A Major Step Forward for Eskom

President Cyril Ramaphosa has highlighted a significant milestone in South Africa’s energy sector, marking the first time in eight years that Eskom, the national power utility, has returned to profitability. This achievement is seen as a positive sign that the country's efforts to stabilize the utility and address the ongoing electricity crisis are beginning to bear fruit.

In his weekly letter to the nation, Ramaphosa emphasized that the improved financial position of Eskom is a result of sustained reforms and long-term investments, even during challenging times. He pointed out that when the National Energy Action Plan was introduced in 2022, Eskom was facing severe financial difficulties, with losses amounting to R12.3 billion and debt exceeding R300 billion. At that time, Eskom’s auditors had raised concerns about the utility’s ability to continue operating.

Ramaphosa attributed the turnaround to enhanced collaboration between government departments, the work of the National Electricity Crisis Committee (NECOM), and the dedication of Eskom’s leadership and staff. He noted that reduced reliance on diesel, thanks to improved performance at coal-fired plants, has saved the utility approximately R16 billion. Additionally, the number of days with loadshedding has significantly decreased, from 329 days in the previous financial year to just 13 in 2025.

“Eskom is to be congratulated on this achievement,” Ramaphosa said. The utility is now in a position to invest in critical infrastructure and maintenance under its Generation Recovery Plan, with more than R320 billion allocated for expansion projects.

Despite these positive developments, Ramaphosa warned that serious challenges remain, particularly regarding rising municipal debt. He mentioned that municipal arrears owed to Eskom have increased by 27% since the previous financial year. “We continue to work with municipalities to come up with sustainable solutions that enable them to settle their accounts with Eskom, as this is key to its financial viability,” he said.

Commitment to Broader Reforms

Ramaphosa reaffirmed the government’s commitment to broader reforms in the energy sector. “Even as Eskom continues along the path to recovery, we continue to pursue the other pillars of the Energy Action Plan with equal vigour,” he stated. These include accelerating new generation capacity, increasing private sector investment, and implementing structural reforms.

The Electricity Regulation Amendment Act, which came into force in January, allows for the unbundling of Eskom and greater private participation in the electricity market. “This legislative amendment paves the way for a more competitive electricity market,” Ramaphosa said. It enables the restructuring of Eskom into separate generation, transmission, and distribution units, as well as for private sector investment and diversification that will ultimately benefit consumers.

Ramaphosa added that Eskom, in partnership with the private sector, plans to build around 14,000 km of new transmission lines over the next decade to support the expansion of generation capacity.

A Testament to Consistency and Collaboration

The financial recovery at Eskom is proof of the value of consistent policy, long-term planning, and effective cooperation. “The financial improvement at Eskom bears witness to the strength of these multi-sectoral partnerships, but also to the value of consistency and forging ahead with long-term goals, even in the face of strident criticism.”

“The ongoing structural reform process represents exactly this consistency and resilience. We will continue along this recovery path across the economy to achieve our goal of inclusive economic growth that creates more jobs for our people.”