- Eskom plans to return to the capital markets in 2028 to fund expansion.
- South Africa’s state owned energy utility plans to invest over R320 billion over the next five years upgrading its infrastructure with advanced technology for greater efficiency and reliability which includes 5.9GW of clean energy capacity.
Eskom announced its group annual results for the 2025 financial year ended 31 March 2025. Eskom started with its turnaround strategy in FY2024, with the FY2025 results demonstrating the recovery of operational and financial performance. “Eskom is increasingly a sustainable, investable company ready to compete in a liberalised, competitive energy market, and is very different from the crisis that in October 2022 the current Eskom Board inherited when they took office. The comprehensive diagnostic review at the time reaffirmed Eskom’s strategic direction and highlighted the need to recalibrate execution timelines and intensify delivery against strategic objectives that we have supported the Executive Committee to deliver,” said Mteto Nyati, Eskom Chairman.
“Following years of constrained performance, we are beginning to see the tangible benefits of our recovery strategies, with marked improvements across key financial metrics driven by the operational turnaround. As Eskom stabilises, the migration towards a more appropriate tariff path that balances customer affordability with Eskom’s financial sustainability is a key priority to ensure the sustainability of the industry. This is necessary to support the competitiveness of energy-intensive users and safeguard vulnerable sectors,” said Calib Cassim, Eskom Chief Financial Officer.
Cassim announced that Eskom intends returning to the capital markets to fund expansionary requirements from FY2028. New borrowings will be limited to ±R25 billion per year for emissions reduction, clean energy generation and transmission network expansion. The funding will be sourced partly through sustainability-linked bonds. Eskom’s current debt securities and borrowings stand at R372.6 billion.
“Borrowings will be limited to a sustainable threshold of R300 billion to improve gross debt/EBITDA to ~3.00 and thereby, ensure financial stability. Reducing Eskom’s debt balance is a focus to strengthen the balance sheet, lower the interest burden and position for sustainable growth. We must generate sufficient operating cash flows to fund most of our capital expenditure requirements for existing plant without further leveraging the balance sheet,” said Cassim.
“Eskom’s stability and performance are vital to South Africa’s growth and development, through sustained economic growth and job creation. The focused and ongoing efforts of Eskom’s 42 000 employees in delivering the turnaround strategy have produced tangible results. According to a report by the Council for Scientific and Industrial Research (CSIR), titled Utility-scale Power Generation Statistics in South Africa, published on 17 March 2025, the South African economy lost up to R2.8 trillion due to loadshedding in the 2023 calendar year. In 2024, that figure was reduced by 83% to R481 billion,” said Eskom Chief Executive, Dan Marokane.
Eskom’s investment mix leading up to 2030
Image credit: Eskom
“We are reinvesting profits back into national assets. Over the next five years, with continued rigorous focus, we will invest more than R320 billion in sustaining and expanding our infrastructure for the long-term benefit of the nation. In a break from the past, we are accelerating the review and restructuring of our cost base. This is being done within the framework of the expected future single-digit tariff increases allowed by NERSA, as we drive efficiencies and take control of the factors within our control to address the affordability of electricity,” concluded Marokane.
Author: Bryan Groenendaal
