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Having finally announced the completion at the end of September of its generation build programme, which included two mega coal projects that ran years behind schedule and tens of billions over budget, Eskom has outlined plans for a R320-billion investment programme for the coming five years.

The programme includes greenfield generation projects, which Eskom has been disallowed from pursuing since 2023 without the explicit permission of the Finance Minister as part of the terms of a R230-billion debt-relief package, under which it is still trading.

Speaking at the group's results presentation, outgoing CFO Calib Cassim revealed that 43%, or R139.5-billion, of the planned capital expenditure (capex) would be directed towards generation, including R18.5-billion earmarked for renewables and gas projects.

CEO Dan Marokane acknowledged the recent "setback" to its proposed 3 GW combined cycle gas power plant in Richards Bay, after the Supreme Court of Appeal set aside its environmental authorisation in September. The court found that the public participation process had failed to meaningfully include isiZulu-speaking communities affected by the KwaZulu-Natal project.

However, he said Eskom was ready to redo the exercise, with the intention of "making sure that we bring in gas-to-power come the 2029/30 financial year".

Marokane also reiterated that Eskom planned to build 2 GW of renewables by 2026 and increase its renewables generation to close to 6 GW by 2030, restating the group's intention to develop a standalone business known as Eskom Green.

The investment plan also involves a significant ramp-up in the transmission capex by the National Transmission Company South Africa (NTCSA), with R132-billion earmarked for the Transmission Development Plan (TDP).

Grid-related investment would rise from R9.8-billion in the current 2026 financial year, to R22.1-billion in 2027, R28.7-billion in 2028, R33.1-billion in 2029 and to R38.9-billion in 2030.

"NTCSA will focus on the TDP roll-out and supporting the coming into being of the Independent Transmission Project programme," Marokane said, referring to government's moves to integrate private sector participation in a bid to accelerate grid investment, which lagged while Eskom focused on its coal projects.

He would not be drawn on whether the NTCSA would be unbundled with its assets, saying only that the "end state" was currently being deliberated upon by its shareholder department. This, after the board had made a recommendation on the restructuring, which he insisted was in line with the stipulations of the Electricity Regulation Amendment Act.

The legislation, which came into force this year, provides a five-year grace period for the creation of an independent transmission system operator.

Meanwhile, some R44-billion had been allocated for distribution, with 64% of that capex set aside to accelerate the roll-out of smart meters over the next three years.

Marokane said the investment would proceed ahead of the separation of the distribution business into the National Electricity Distribution Company of South Africa, the unbundling of which was facing headwinds caused by rising municipal arrear debt, which currently stood at R103-billion.

RETURN TO CAPITAL MARKETS

Cassim also announced that Eskom intended returning to the capital markets during its 2028 financial year, even though the conditions of the debt-relief package remained in effect until the 2029 financial year.

He indicated that Eskom could access external funding with approval from the Minister of Finance and provided it was undertaken at a pace that Eskom's balance sheet could support.

He said new yearly borrowings would be limited to about R25-billion and would be used for emissions reduction, clean energy generation and transmission network expansion.

The immediate priority, though, was to reduce its debt to a more sustainable level which he pegged at about R300-billion, should its yearly earnings before interest, taxes, dep...

Eskom CFO Calib Cassim warns that municipal arrear debt owing to Eskom could exceed R300-billion by 2030, while once again highlighting the failure of the current National Treasury initiative to arrest the crisis.

Cassim, who will retire from Eskom in 2026, reported at the group's results presentation that debt owed to Eskom by municipalities had increased by 27% to R94.6-billion in the year to March 31, 2025, and had since climbed to above R103-billion.

"If this trend is not resolved going forward, we could see by 2030 the arrears being over R300-billion rand, which far outweighs the benefits of the debt relief of R230-billion [received from the National Treasury] in terms of our cash flow."

Eskom reiterated that the National Treasury's municipal debt relief programme had not been successful in stemming the escalating levels of arrear debt. Under the scheme, municipalities are able to write off their legacy debt to Eskom if they meet certain conditions, including keeping their current accounts with the utility up to date.

Eskom also warned that, unless innovative solutions were found, the financial sustainability of the yet-to-be-unbundled National Electricity Distribution Company of South Africa would be jeopardised, with knock-on effects for Eskom Generation and the National Transmission Company South Africa.

Cassim said Eskom and government were exploring alternative solutions, including distribution agency agreements (DAAs) and prepaid supply models.

"DAAs will support municipalities in ensuring sustainable local service delivery while contributing to Eskom's financial sustainability through improved billing and revenue collection," he argued.

Energy Intensive Users Group (EIUG) CEO Fanele Mondi described municipal debt as now posing the greatest threat to Eskom's financial sustainability.

Mondi highlighted that Eskom was forecasting that this debt would grow to up to R135-billion during its current financial year, which would represent a 43% increase on the R94.6-billion reported in 2025.

"In a ten-year period, 2015 to 2025, this debt increased from R5-billion to R94.6-billion, an over 1 800% increase.

"The current mitigation plans are clearly not delivering the desired results.

"Government and relevant stakeholders must intensify efforts to assist Eskom in managing this burden, as Eskom's financial instability directly impacts EIUG members, the rest of consumers, and the economy," Mondi said.

In addition, Eskom reported that 14.9 TWh of electricity was lost to theft in its 2025 financial year, while reporting overall sales volumes of 189.7 TWh.

Cassim calculated the financial impact of the theft at R28-billion, up from an estimated R23-billion lost to theft in the 2024 financial year.

Eskom planned to roll out 7.2-million smart meters in the coming years as a way to combat the losses and was also planning to accelerate the implementation of a new online vending system for the generation of prepaid tokens.

This, following evidence that the current system had been breached, resulting in large-scale fraud.

The National Energy Regulator of South Africa (Nersa) has launched a market inquiry into the impact of fixed charges being levied by Eskom and municipal electricity distributors, which it claims have already resulted in hikes for some customers that are substantially higher than the 12.74% increase approved for 2025/26.

A terms of reference document has been published with a deadline for written comments set for October 25, and with public hearings scheduled for November 17.

Nersa indicates that the inquiry has been prompted by concerns being raised in relation to the fairness of recent increases in fixed charges, including those made by several customers that have lodged formal disputes before the regulator.

Nersa will continue with the adjudication of these disputes, but has also decided to initiate the inquiry in parallel. This, owing to similarities in the nature of the complaints, including concerns about potential market distortions and the abuse of market power.

"Although the inquiry is not targeted at investigating any particular licensee, nor does it intend to make allegations against any licensee, Eskom will be included in the inquiry due to the imposition of significant fixed charges following the approval of its Retail Tariff Restructuring Plan in March 2025," Nersa has confirmed.

In its terms of reference document, Nersa said the market inquiry will focus on municipal fixed charges, as well as the split of Eskom's generation charge into a generation capacity charge, a legacy charge and the variable energy charge.

"While such changes may be necessary, they must be carefully managed to ensure that they meet the principles of fairness, transparency, and equitability. An imbalance in the unbundled tariff designs threatens affordability, reliable service delivery, and broader socio-economic resilience," the document adds.

The inquiry will assess the impact of the charges across various business and residential customers, including those exposed to Eskom's Megaflex tariff and those that have installed rooftop solar.

The aim will be to assess the impact that the fixed charges are having across all customer segments, as well as to evaluate their alignment with approved tariff methodologies.

Full-time regulator member responsible for electricity regulation Nomfundo Maseti reports that the aim of the inquiry is to provide regulatory guidance that "promotes fairness, cost-reflectivity, and stability in the electricity market".

Nersa indicates that the market inquiry will have three phases, with the first phase involving written and oral submissions.

During the second phase, Nersa will draft a report, which will again be released for public comment, with hearings to be held in January.

During the third phase, the final report will be drafted for approval by the Energy Regulator, Nersa's highest decision-making body, in February, with the final report scheduled for release in March.

Unit 6 at Kusile power station has officially entered into commercial operation, which Eskom says marks the end of its multi-decade build programme - one which experienced well-publicised delays, major cost overruns, and technical problems, alongside allegations of serious corruption that featured heavily at the Commission of Inquiry into State Capture.

Construction on the Mpumalanga coal-fired power station started in August 2008 and was initially expected to take six years to complete, while the project's initial budget of about R80-billion subsequently swelled to above R233-billion.

In a statement, Eskom claimed that with Unit 6 online, Kusile and Medupi now had a combined 9 600 MW when operating at full capacity and that the two power stations would help strengthen electricity supply, which had stabilised recently following years of loadshedding.

This, after Medupi Unit 4 was reintroduced in July following a protracted repair. The unit had been out of service since August 8, 2021, after its generator stator was damaged in an explosion.

Located in the Limpopo province, Medupi is a similar mega-scale coal project to Kusile and was built largely in parallel to the Mpumalanga project.

However, Medupi has not yet included the flue gas desulphurisation (FGD) pollution control systems that have been integrated, with much difficulty, at Kusile.

The FGD system at three Kusile units was bypassed for 13 months to allow three units to resume operation using temporary stacks, after the Unit 1 flue duct collapsed because of an uncontrolled build-up of slurry on October 23, 2022.

The failure eliminated 2 100 MW of Kusile's capacity from an already stretched system at the time, as the flues for units 2 and 3, which share a chimney with the Unit 1 flue, were also damaged by the collapse.

The plant is the first in Africa to employ wet FGD technology and Eskom is still assessing what FGD solution to fit at Medupi, in line with a World Bank loan stipulation.

Unit 6 has in fact been supplying electricity to the grid since its synchronisation on March 23, 2025, but Eskom said the declaration of commercial operation signalled that the unit had passed all required testing and optimisation phases and had been fully integrated into Eskom's operational fleet.

"The successful commissioning of Unit 6 adds 800 MW to the grid and completes our twelve-unit megaprojects fleet," group executive for generation Bheki Nxumalo said in a statement, while acknowledging the "many challenges along the way".

All of Kusile's units will now be officially recorded in Eskom's energy availability factor (EAF), which has recovered strongly in recent months.

On September 26, Eskom reported a month-to-date EAF average of 71.15%, and stated that the last time it trended above 70% was in 2021.

CEO Dan Marokane said the Unit 6 milestone not only completed the Kusile build programme but also reinforced Eskom's commitment to restoring energy security.

That said, he reiterated Eskom's intention to invest in renewables, with a standalone unit in the process of being established to pursue such projects in partnership with the private sector.

South Africa is thankfully surfacing from a period of prolonged electricity disruption that all but stripped the country of its ability to grow and create jobs for more than a decade. But this prevailing supply stability should not be taken to mean the risks have disappeared. There is a serious investment backlog across the value chain that is being masked by falling demand.

In addition, supply stability is not fully concealing the sustainability pressures.

On the demand side, these stresses are evident in the affordability crisis that is resulting in the closure of electricity-intensive enterprises, high rates of electricity theft, nonpayment of municipal debt to Eskom, and ongoing load reduction in poor areas.

On the supply side, there are a number of new projects being built, but their scale is well below that which is needed. There are also serious grid-access delays for new projects, a stretched physical infrastructure, tussles over the way regulated tariff rules are being applied and increasingly muscular resistance to market reform.

There are changes under way, supported by important adjustments to legislation. Yet, there does not appear to be a joined-up approach to managing these changes, and the gaps are being filled opportunistically.

Such opportunism is facilitated by the fact that South Africa currently does not have a clear grasp of the centrality of electricity to future growth and development. Hence, the country has no clear vision for the electricity industry. Instead, there is an all-of-the-above approach, whereby electricity is viewed as but one component in a larger energy mix.

This is only natural, as the approach is largely being shaped with reference to the past , not the unfolding future. Doubly so given current geopolitical dynamics, desirous of an energy past that, for various reasons, is no longer viable.

Nevertheless, this lack of vision means that South Africa is at risk of missing yet another opportunity - one that is powerfully articulated in new research by global energy think-tank Ember, and titled 'The Electrotech Revolution'.

At the heart of Ember's argument is that 'electricity is the king of energy'; that renewables electricity is replacing fossil electricity; and that electrotech such as solar, wind, batteries, heat pumps, electric vehicles, and digital solutions will progressively absorb end-user energy demand, including in transport, heating, buildings and industry.

Ember argues that this shift is driven by physics, which gives electrotech an efficiency advantage over the burning of fossil fuels. By economics, as manufactured technologies such as solar PV get cheaper with scale, while commodities get more expensive to extract. And geopolitics, whereby countries will seek to shore up energy independence by exploiting domestic renewables resources.

For South Africa, there are two other key takeaways. Emerging markets will have the lowest electricity costs, as they mostly lie in the Earth's 'sunbelt'. While the economic benefits for end-users of an electrotech such as a solar panel are a hundred times greater than the profits that flow to the manufacturer of that panel.

Engineering News editor Terence Creamer discusses government's interventions to tackle load reduction, which is highly disruptive to the lives of people living in areas where electrical overloading is common.

The CEO-led business partnership that is currently assisting the South African government with the implementation of turnaround initiatives in electricity, transport, crime and youth unemployment is considering adding a new workstream to focus on the recovery of the City of Johannesburg.

Discovery CEO Adrian Gore, who is coordinating the partnership that is being implemented under the aegis of Business For South Africa (B4SA), said the decision to consider adding Johannesburg as an additional focus area was based on the importance of the city in raising overall growth and confidence.

Highlighting the positive results that had been achieved in addressing loadshedding in particular, Gore said he was optimistic that the recovery of Johannesburg could benefit from a similar level of focus and support.

Gore, who has been a leading figure in facilitating the partnership on the basis that it would help stimulate growth and job creation, and in changing the narrative about South Africa in a way that would attract domestic and foreign investment, described the current poor state of the country's economic hub as an obstacle to shifting investor sentiment.

"There's low-hanging fruit, we think.

"There's a lot of expertise and there's a lot of involvement in the city anyway from business - so can it be organised and structured in a way that's constructive?

"We think that that needs to be investigated," Gore explained.

Discovery, he noted, had filled hundreds of thousands of potholes, which had given him confidence that it was feasible to make a difference in the city.

"Obviously there are some profound issues that will take a lot more time, but there is such a vast interest in the city, as the economic hub, that to see decline is very, very problematic."

B4SA had already identified CEOs that could lead the workstream and was currently conducting an assessment of the prospect of adding Johannesburg as its fifth focal area, with a final decision likely in November.

It comes ahead of what is poised to be a highly contested municipal election in 2026, with the Democratic Alliance (DA) having selected its former leader Helen Zille, who was a successful mayor of the City of Cape Town before becoming Premier of the Western Cape, as its mayoral candidate for Johannesburg.

It also follows a spat that has arisen within the African National Congress, which currently leads a coalition government in Johannesburg, over President Cyril Ramaphosa's recent dressing down of the party's municipal councillors, where he suggested they could learn lessons from DA-led municipalities.

B4SA's Martin Kingston stressed that should Johannesburg be added as a focal area it would do so in a way that avoided politics and focused on specific areas of implementation support.

"We are not going to become involved in the politics. We've made that clear at all levels of government, including at a national level," Kingston said.

Business leaders speak on South Africa's current energy transition priorities

Engineering News & Mining Weekly has canvassed business leaders for their opinions on the priorities for South Africa's electricity sector, as well as what role the Energy Council of South Africa should play in helping the country and business navigate the unfolding energy transition.

Below you can read the contributions of the of the following thought leaders: Absa Business Banking's Rashveer Manilal, African Clean Energy Developments & Energy Infrastructure Management Services' Yaseen Mahomed, Air Liquide's Lasad Jaouani, Etana Energy's Evan Rice, Mulilo's Jan Fourie, Nedbank CIB's Dhireshni Chowthee, Red Rocket's Matteo Brambilla, Seriti Green's Peter Venn, Siemens Energy's Thabo Molekoa and Stand Bank South Africa's Deerosh Maharaj.

Absa Business Banking Rashveer Manilal Renewable Energy Sector Head

South Africa's biggest energy challenge lies in its reliance on ageing, coal-based infrastructure, which is environmentally unsustainable. The rising cost of electricity and energy outages continue to undermine economic productivity, investor confidence and the daily lives of millions. At the same time, regulatory complexity and grid constraints hinder rapid adoption of alternative solutions.

Within this challenge lies South Africa's greatest energy opportunity; a fast, just transition to renewables. With abundant solar and wind resources, the country is uniquely positioned to lead the continent in clean energy.

Additionally, given our country's unique challenges, we consider gas to be an important transition fuel and we support the development of gas infrastructure, including gas-to-power plants, as it is a cleaner fuel source than coal and/or diesel and can support the build-out of renewable energy by providing baseload supply or hybrid options.

Investing in decentralised generation, along with battery storage and grid modernisation, will not only stabilise supply - particularly for businesses and communities vulnerable to outages - but also stimulate local manufacturing, energy reliance and job creation within the green economy, which includes sectors such as renewable energy.

At Absa Business Banking, we see energy security as both a national imperative and a catalyst for inclusive growth. Renewable energy is cheaper and cleaner than traditional coal-powered energy. That's why we are actively supporting our clients in financing embedded generation, energy efficiency upgrades and sustainable infrastructure.

Over the past ten years, Absa has been a leading financier in renewable-energy installations across the country, in both the commercial and the utility-scale space. We also offer advisory support to help businesses navigate regulatory requirements and unlock the benefits of green investment.

By aligning our financing solutions with South Africa's climate and development goals, we're helping to build a more resilient, low-carbon economy - one powered by innovation.

African Clean Energy Developments & Energy Infrastructure Management Services Yaseen Mahomed Head of Business Development

South Africa's biggest energy challenge is its reliance on an ageing, coal-heavy utility fleet and a constrained national grid. To ensure a just transition, we must urgently add reliable, clean capacity that balances social and environmental priorities.

This challenge presents a major opportunity: unlocking South Africa's world-class renewable resources through innovative business models and grid expansion. By attracting private capital, diversifying offtake markets and accelerating decarbonisation, we can drive sustainable development.

The rise of commercial and industrial procurement, alongside the REIPPPP, is already boosting investment, energy security and industrial competitiveness. The upcoming South African Wholesale Electricity Market will further liberalise the sector, enabling transparent, competitive private-sector participation.

African Clean Energy D...

Electricity and Energy Minister Dr Kgosientsho Ramokgopa has unveiled a new smart meter-led strategy to address the ongoing problem of load reduction, where the supply of electricity to poor communities is cut during peak periods to avoid infrastructure being damaged by overloading caused by illegal connections.

The power cuts are indiscriminate and, thus, also affect households in those areas that pay their electricity accounts.

Load reduction is currently affecting 1.6-million Eskom-connected households across 971 feeders, negatively affecting the quality of lives of some 8.5-million people. The figure for municipal households is still being compiled.

The strategy, which will be implemented over the coming 12 to 18 months, has not yet been fully costed with Eskom still to launch a formal tender for the supply of the smart meters.

However, Ramokgopa indicated during a briefing that he would be seeking Cabinet approval to use part of the R4-billion Integrated National Electrification Programme budget to fund the roll-out.

The initiative is also distinct from the National Treasury's R2-billion programme to install 250 000 smart meters over a three-year horizon to 2027/28. This, under the so-called RT-29 transversal tender awarded to several service providers in 2023, namely African Metering Solutions, Cigicell, Conlog, Isandiso, Landis + Gyr, MTN and Vodacom.

SMART METER TENDER

Eskom acting group executive for distribution Agnes Mlambo did not entirely discount the prospect of piggybacking on the transversal tender. However, she indicated that Eskom was likely to launch its own commercial process given that it intended replacing 6.2-million meters with smart meters by 2029.

No precise timeframe was provided for the launch of the tender, but Ramokgopa insisted that Eskom already had smart meters in hand to launch the programme.

He expressed confidence that load reduction could be ended within 12 months, and again insisted that the cuts had nothing to do with Eskom's ability to supply, noting that the areas affected could be supplied with 530 MW.

"We are generating substantially more than that … So, there is no relationship between our generation capacity and load reduction."

Eskom had mapped all the areas being affected regularly by load reduction, with over 632 150 of the affected customers being in Gauteng, mostly in recognised informal settlements, followed by Limpopo (349 370 customers) and Mpumalanga (335 550 customers).

The programme to eliminate load reduction would be carried out in phases, with the first phase to prioritise 291 feeders across multiple provinces between now and the end of March, followed by two more phases with the aim of wrapping up the programme by the end of March 2027.

Ramokgopa acknowledged, however, that the pace of deployment would depend heavily on the success of community engagement processes.

These would rely heavily on municipal ward councillors, mayors and, in rural areas, on traditional leaders.

FREE BASIC ELECTRICITY

Ramokgopa indicated the intention was also to couple the roll-out to the creation of credible indigent registers to ensure that those who were eligible for free basic electricity (FBE) received the benefit after their smart meter was installed.

Currently, only 485 000 indigent households were receiving the 50 kWh FBE allowance, despite there being an estimated 2.1-million households potentially eligible for the allowance.

Once a smart meter was installed, Ramokgopa indicated that the 50 kWh could be loaded monthly without the money having to first flow to municipalities, many of which were currently redirecting the allowance elsewhere.

In addition, the size of the allowance could be increased under a new Electricity Pricing Policy that the Department of Electricity and Energy was in the process of updating.

Ramokgopa said that the policy, as well as the FBE subcomponent, would be subjected to public participation, probably early in 2026.

"We're going to open this for engagem...

Import duty investigations in South Africa are currently taking an average of 27 months to complete - more than four times the official target of six months, and with the oldest open tariff probe standing at 64 months, or nearly six years.

These findings are contained in the seventh and latest yearly analysis conducted by XA Global Trade Advisors and published in a report ominously titled 'The Tariff Zombies' that shows that 80% of open cases are older than six months.

The report also highlights the growing size of the investigation backlog being faced by the International Trade Administration Commission of South Africa (Itac), with more cases being added yearly than are being finalised.

CEO Donald MacKay says that clearing the backlog will require decisions to be made expeditiously to either approve duty changes or reject them, as further delays will result in the "zombie" applications that contain outdated information crowding out current applications.

Such delays have material implications for businesses that approach Itac for relief, including for the enterprise itself, but also for jobs and for consumers.

He warns that there has also been a change in the reason for the delays, with Itac now taking longer (18 months on average) to complete investigations. Whereas previously a large portion of the delay could be attributed to the lag between the completion of investigations and the receipt of Ministerial approvals.

While acknowledging that such investigations are complex, MacKay argues that even the most complicated tariff investigation should never take 18 months to complete.

The report also raises concern over the lack of duty reviews, which is resulting in "evergreen protection", in some instances for products that are no longer even produced locally.

"Between July 2024 and June 2025, South Africa imported under 3 607 tariff codes that attracted a duty, meaning South Africans would have paid an eye-watering total of R103-billion in duties.

"Of these duties, 3 377 tariff codes were last reviewed before 2005 and accounted for duties of R 96.8-billion.

"This means that in the last 20 years (2006 to 2025), only 230 tariff codes have been reviewed, which is only 6.4% of the tariff codes that attract a duty," the reports states.

In addition, instead of making duty reduction applications, MacKay says companies are being encouraged to seek rebates.

"This does not fix the underlying problem, allowing import duties to remain evergreen and

adds complexity and additional administrative actions.

"Itac needs to establish if there are still local manufacturers, and if there are not, remove the duties," he avers.