Eskom’s Return to Profit Marks a Turning Point in South Africa’s Energy Future

President Cyril Ramaphosa has hailed Eskom’s first return to profitability in eight years as a major milestone in South Africa’s journey toward energy stability and economic recovery. In his latest weekly newsletter, the President described the achievement as a “testament to the value of staying the course” and to the benefits of sustained partnerships between government, business, and society.

A Historic Turnaround for Eskom

The President noted that Eskom’s financial rebound reflects the fruits of consistent reform and operational discipline. The power utility, long burdened by debt, operational inefficiencies, and rolling blackouts, has managed to reverse years of decline through its Generation Recovery Plan — a comprehensive strategy focusing on maintenance, infrastructure upgrades, and the gradual stabilization of its coal fleet.

Eskom’s improved financial position, Ramaphosa said, “will enable it to invest in critical infrastructure and maintenance,” with over R320 billion earmarked for expanding existing capacity and modernizing key assets.

Operational Recovery and Diesel Savings

A significant factor in Eskom’s improved finances has been the dramatic increase in the reliability of its coal-fired plants. With fewer breakdowns and improved generation efficiency, the utility has reduced its dependence on expensive diesel generators. This operational improvement resulted in R16 billion in savings on diesel costs over the past financial year.

Even more striking has been the reduction in load-shedding. In the 2025 financial year, South Africans experienced power cuts on just 13 days, compared to 329 days the year before — a monumental turnaround that underscores Eskom’s progress in restoring generation capacity and operational stability.

Challenges Persist: Municipal Debt and Grid Expansion

Despite the optimism, President Ramaphosa cautioned that challenges remain. Municipalities owe Eskom billions in unpaid electricity bills, with arrears rising by 27% since the previous financial year. “We continue to work with municipalities to come up with sustainable solutions,” he said, emphasizing that resolving this issue is essential to Eskom’s long-term financial health.

In parallel, Eskom is preparing for one of the largest grid expansions in decades. The company, in partnership with the private sector, plans to construct approximately 14,000 km of new transmission lines over the next ten years — a move crucial to integrating renewable energy sources and ensuring stable power delivery nationwide.

Partnerships Driving Energy Security

Ramaphosa credited the success of the National Energy Crisis Committee (NECOM) and the Government-Business Partnership for fostering collaboration that transcends bureaucratic boundaries. “Two years since its inception, this collaborative model continues to yield results not only around energy but also in transport, logistics, crime prevention, and youth employment,” he said.

The President reaffirmed that South Africa’s path toward energy security and economic renewal depends on continued cooperation among social partners, emphasizing that reform and partnership remain the cornerstones of sustainable progress.

A Broader Economic Vision

Eskom’s recovery forms part of a wider structural reform process aimed at achieving inclusive economic growth. “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,” Ramaphosa said.

The President’s message underscores a renewed sense of optimism — that after years of instability, South Africa’s energy future may finally be entering an era of steady recovery and transformation.