By Lehlohonolo Lehana.
National Energy Regulator of South Africa (NERSA) on Thursday granted Eskom an average tariff increase of 12.7% for 2025/26, a third of what Eskom had requested.
Thembani Bukula, chairman of Nersa, said they had also approved an 11% increase for the 2026/27 financial year and a 9.1% hike for 2027/28.
For 2025/26 the increase will provide R384-billion in revenue for Eskom and will kick in from 1 April.
Bukula said Nersa had heard the pleas of domestic consumers and businesses that an electricity increase along the lines of Eskom’s original request of 36% would be disastrous for households and businesses.
Eskom had based its request on several factors, which were explained by its chief financial officer, Calib Cassim, during the Nersa hearings. These included that the regulator had not allowed Eskom to recover the cost of producing electricity for many years.
The increase in municipal debt from local governments not paying their accounts were also raised as a significant risk by Eskom.
Meanwhile Eskom made a significant half-year profit of R17.83 billion as the utility’s turnaround extends to its financial health.
Eskom released its interim results for the six months through September 2024 on Thursday, which showed a remarkable improvement in the utility’s financial performance.
The utility reported revenue of R183.71 billion, an almost 16% increase from the comparative half-year period. Eskom’s EBITDA rose by 64% to R61.66 billion.
The company’s profit for the six-month period was R17.83 billion – up over 1,000% from the R1.61 billion it recorded in 2023.
The utility explained that its revenue improved due to higher tariffs, the suspension of load-shedding, and the impact of seasonality. Eskom’s improved financial performance coincides with a positive turnaround in its operations.