Eskom received R80 billion of taxpayer bailout money but still increased electricity prices by 12.74%

Member of Parliament Kevin Mileham said that while Eskom’s financial recovery is welcome, we should not confuse better numbers with a sustainable business model.

His warning followed Eskom’s latest financial results, which showed that the power utility achieved a R30.3 billion profit.

However, this number alone does not indicate a successful turnaround or a sustainable business model.

Mileham highlighted that Eskom benefited from an R80 billion debt-relief payment from the state, which ultimately came from taxpayers.

Another reason for the better financial performance is Eskom’s large price increases. The utility’s standard tariff increased by 12.74%.

Also telling is that electricity sales fell by 6.2% to 178 TWh, as industrial demand weakened and more customers generated their own power or used less.

“This should concern every electricity consumer. Eskom is selling less electricity but earning more from higher tariffs,” Mileham said.

“It is now proposing a further 8.83% increase for direct customers and 8.84% for municipalities in 2027/28.”

He said that Eskom must be credited for operational improvements, including better plant performance, lower diesel use, and stronger cost control.

However, these gains do not remove the underlying problem, which is a shrinking sales base, high debt, rising municipal arrears and increased tariffs.

“Eskom’s debt securities and borrowings stood at R356 billion at the end of March before falling further after debt repayment,” he said.

However, the improvement has not been organic. It was materially assisted by taxpayer-funded debt relief.

Municipal arrears, in turn, have now climbed to R122.5 billion. This is the biggest financial threat to the power utility.

“Moving more municipal revenue directly to Eskom may improve collection, but it does not fix the economics of the electricity system,” said Mileham.

Governance also remains a problem. Eskom received a qualified audit opinion because its auditors could not confirm that irregular expenditure was fully reported.

“Despite progress in closing previous audit findings, a qualified audit remains a warning that financial controls are not yet where they need to be,” he said.

“Eskom should be financially sustainable because it is efficient, competitive, and well governed. South Africans cannot be expected to keep paying more for less.”