Eskom plans R320bn infrastructure overhaul as it returns to profitability

Eskom has reported its first profit in eight years of R16 billion, reversing last year's R55 billion loss.

This comes as it plans a R320 billion infrastructure upgrade over the next five years, which it won’t fund through bailouts.

The investment will focus on modernising generation capacity, including R18.5bn for renewable energy and gas projects.

To fund expansion plans, Eskom will tap capital markets at a time when a new board is set to take over.

Despite improved performance, the utility has been financially dependent on government support.

Since 2008/09, Eskom has received roughly R496 billion in bailouts, with recent debt relief addressing R230 billion for 2025-2026.

“Eskom will not be getting any bailouts going forward," said Minister of Electricity and Energy, Kgosientsho Ramokgopa.

Its balance sheet shows a liability in the form of a loan from government of R56bn, which is up 75% year-on-year.

Chairman Mteto Nyati credited the turnaround to a generation recovery plan that served as "our North Star for two years," transforming what he called a previously dysfunctional and disorganised entity.

However, escalating municipal debt threatens sustainability.

Municipalities owe Eskom R103.5 billion, with major cities like Johannesburg and Tshwane failing to meet obligations.

In July, the Chairperson of the Standing Committee on Appropriations, Dr Mmusi Maimane warned this debt poses significant risk to Eskom's financial viability.

Eskom repaid R46.4 billion in debt and R33.4 billion in interest during the year.

While government support remains essential short-term, the utility acknowledges it must achieve standalone financial sustainability to address systemic challenges.

IOL