By Lehlohonolo Lehana.
President Cyril Ramaphosa has lauded a dramatic turnaround in the state owned power utility Eskom’s financial and operational performance.
Eskom reported its first full‑year profit in eight years on Tuesday, helped by government debt relief, higher tariffs and a sharp reduction in power cuts.
The power utility made a profit after tax of 16.0 billion rand in the year to the end of March 2025, compared to a 55.0 billion rand loss a year earlier.
The company said it would reinvest profits into its infrastructure, targeting 320 billion rand of investments over the next five years.
Despite this more grounded assessment of Eskom’s turnaround, Ramaphosa said that the utility’s management should be praised for the operational changes.
“As the reliability of Eskom’s coal-fired plants has improved, there has been less need to burn diesel, resulting in approximately R16 billion in savings on diesel costs,” he said.
“In the 2025 financial year, the country experienced loadshedding on just 13 days, down from 329 days the year before. Eskom is to be congratulated on this achievement.”
The president also noted that the return to profitability, regardless of the core sources, means that Eskom can invest in critical infrastructure and maintenance under its Generation Recovery Plan.
To this end, he said there are plans to invest more than R320 billion in expanding existing infrastructure, while accelerating the procurement of new generation capacity, increasing private investment and pursuing structural reforms to transform the electricity sector.
However, the president highlighted the mounting problems with municipal debt, stating that this issue needs to be addressed urgently.
“Municipal debt arrears have grown by 27% since the previous financial year, “Ramaphosa said.
“That is why we continue to work with municipalities to come up with sustainable solutions that enable municipalities to settle their accounts with Eskom, as this is key to its financial viability.”
Eskom’s auditors also flagged this as a huge risk to the utility’s ability to remain a going concern—alongside its over-reliance on government bailouts.
At the end of March 2025, municipal arrear debt amounted to R94.6 billion, representing a 27% increase from the previous year. It amounted to R103.5 billion as of the end of August 2025.
This long-standing debt is growing at an alarming rate, and by Eskom’s own admission, interventions and programmes to address it have not yielded any success.