Eskom reported an annual profit in 2024/25.
Image: File
Although Eskom reported an annual profit in 2024/25, for the first time in a decade, the improved financial performance remains at risk, partly due to escalating municipal debt arrears. A total of 71 municipalities are on the Eskom debt relief package.
Municipalities participating in this programme owed Eskom R85.2 billion in December 2025. Of the 71 participants only 15 have consistently met programme conditions.
To protect the national grid and municipal viability, government will introduce Distribution Agency Agreements (DAA), under which Eskom takes over electricity distribution on behalf of defaulting municipalities to ensure revenue is collected, current accounts are paid and service reliability is restored.
Municipalities refusing these conditions will be removed from the programme and become liable for the entirety of their debts.
In 2023/24, government initiated a debt-relief arrangement to strengthen Eskom's balance sheet, enabling it to restructure and undertake essential investments and maintenance required to ensure a stable electricity supply.
As reported in the 2025 Budget Review, partly in response to Eskom's improved performance, the National Treasury revised the package, extending the support period to 2028/29 and reducing the total relief provided from R254 billion to R230 billion. Legislation introduced in September 2025 provided for these measures. The fiscal risk associated with Eskom has eased, although continued implementation of operational and financial reforms is critical to sustain progress and ensure lasting stability.
A further R80 billion will be disbursed by March 2026 and R10 billion in 2028/29.
The National Energy Regulator of South Africa (Nersa) registered 181 generation facilities during the third quarter (July to September) 2025 with a total capacity of 1 401 Megawatts (MW) and an estimated investment value of R30.8 billion. The generation facilities comprise 175 solar PV, four wind, one biogas and one battery energy storage system facilities. Gauteng had the majority of the solar PV facilities, at 66, even though it’s the smallest province in terms of area and not the best endowed in terms of solar radiation.
Since the inception of the registration regime in 2018, Nersa registered 2 236 generation facilities, with a total capacity of 16 040 MW and a total investment value of R328 billion.
Statistics South Africa in its December 2025 electricity report noted that total South African electricity consumption in 2025 annual consumption was 4.2% less than 2024 and was the lowest since 2001. Treasury said the evolution of the electricity supply industry and the connection of large-scale renewable and distributed energy will require Eskom’s company’s transmission and distribution infrastructure to be significantly strengthened and expanded. This is aligned with the requirements contained in the transmission and distribution network development plans.
It noted that expenditure in the transmission division accounts for 28.3% of total spending, increasing at an average annual rate of 16.5%, from R87.5 billion in 2024/25 to R138.3 billion in 2027/28, due to the execution of the transmission development plan for grid expansion. Spending on distribution accounts for 10.7% of Eskom’s budget over the period ahead.
In October 2025, the cabinet approved the Integrated Resources Plan (IRP) 2025. Overall, the IRP 2025 envisages the introduction of 105 000 MW of new generation capacity by 2039, including: 34 000 MW of onshore wind; 25 000 MW of utility scale solar PV;16 000 MW of distributed generation, mostly in the form of behind-the-meter solar PV; 8 500 MW of storage, mainly in the form of battery energy storage systems; 16 000 MW of Gas to Power (GtP); and 5 200 MW of nuclear, which could include small modular reactors (SMRs) should the technology be proved commercially over the period. The Minster of Electricity and Energy Kgosientsho Ramokgopa said the IRP 2025 had a cumulative net present value cost of R2.2 trillion. He said the two biggest risks were lack of skills and a lack of industrial capacity.
BUSINESS REPORT