Eskom waves goodbye to R20 billion

Eskom’s stronger financial performance is a double-edged sword for the state-owned enterprise, with the government cutting back R20 billion in previously budgeted debt relief.

In 2023, Finance Minister Enoch Godongana announced the Eskom Debt Relief Act, which, as the name suggests, addressed the group’s debt and poor financial state.

The program included a R254 billion debt relief package over three years and included several measures to improve Eskom’s financial performance from several years of state capture.

The utility was battling heightened load shedding, and constant rolling power cuts were devastating the economy.

However, the group has shown signs of recovery over the last year. The group stopped load shedding for close to a year, with only a few periods of load shedding since the start of the year.

Having recently reported an interim profit of R17 billion, Eskom forecasts that it will post a full-year profit of R10 billion for 2024/25. A massive improvement on the R25.5 billion loss in 2023/24.

At the 2025 National Budget, Finance Minister Enoch Godongwana said Eskom is in a much better financial position than in 2023 when the debt relief was originally announced.

Due to these improvements, the government has decided to simplify the final phase of the debt relief package.

This means the last R70 billion debt takeover will now be replaced with R40 billion in 2025/26 and R10 billion in 2028/29.

The Minister said that this would result in a saving of about R20 billion for the government.

Government puts its foot down

The news comes as government officials state that they will tighten Eskom’s operations as little as possible following the return of load shedding over the weekend.

Eskom implemented stage 3 load shedding last Friday due to a trip at the Koeberg nuclear power station, adverse weather that affected coal at Kusile, and the slippage of units from planned maintenance.

Electricity and Energy Minister Kgosientsho Ramokgopa expressed disappointment over the return of stage 3 load shedding.

The minister warned that there would be consequences for Eskom’s failure. The Minister is set to visit power stations to address any issues. He warned that there would be “casualties” where necessary.

Despite the return of load shedding, Eskom could suspend one day ahead of schedule over this last Sunday. This followed the return of units at Kusile.

Power utility Eskom also recently returned the downed Koeberg Unit 2 back to service. The unit was back on the grid on Sunday and incrementally ramped up to 646MW.

The entity said that Unit 2’s output would continue to increase until it reaches the full capacity of 930 MW. Eskom said that it would do “robust nuclear safety protocols,” ensuring a safe return.

Unit 1 and Unit 2 of Koeberg have recently undergone life extension exercises, with Unit 1 being granted a licence to deliver electricity until 21 July 2044.

With Unit 2 in a similar condition to Unit 1, the National Nuclear Regulator was requested to extend its operations for another 20 years. Eskom’s current licence expires on 9 November 2025.