Published on 22 Dec 2025

South African power utility emerges from the dark

A remarkable financial turnaround at Eskom and stable grid sparks a surge in business confidence

Photo source: Eskom

South Africa’s state-owned electricity company Eskom has extended its financial recovery, reporting a 37% jump in half-year profits as it stabilises following years of crippling blackouts. Profit after tax hit R24.3bn (US$1.46bn) for the six months to 30 September. This builds on the group’s breakthrough results in March, when it posted its first full-year profit in eight years. Beyond the balance sheet, the return of stable power has restored a measure of business and investor confidence in the continent’s largest economy.

South Africa has been enduring power instability since 2007, when load-shedding – the common local term for scheduled power cuts – was first introduced. Eskom struggled to keep the lights on as its ageing coal plants faltered under the strain of deferred maintenance. These operational failures were compounded by years of mismanagement, corruption, and a lack of new investment, leaving the utility unable to meet demand. The frequency of outages spiralled, with South Africans experiencing 205 days of load-shedding in 2022, a figure that worsened to 335 days in 2023.

However, 2024 marked a turning point. Load-shedding declined dramatically to just 83 days, before largely disappearing in 2025. A confluence of factors drove this turnaround.

In July 2022, the government launched the Energy Action Plan to arrest the crisis. The strategy aimed to fix Eskom’s existing fleet, get new power onto the grid fast, and liberalise the sector to create a competitive electricity market.

A major breakthrough came when the government scrapped licensing requirements for private generation projects. Developers no longer need approval from the regulator to build plants of any size. This cut the red tape that had long protected Eskom’s monopoly. By October 2025, the pipeline of advanced-stage solar, wind, and battery storage projects had reached 72GW.

Performance at Eskom also improved under revamped leadership. Chairman Mteto Nyati, appointed in late 2023, and CEO Dan Marokane, who took the helm in March 2024, focused on enforcing strict maintenance of power plants and bringing skilled engineers back into leadership positions. They were aided by a law enforcement crackdown on the criminal syndicates that had been sabotaging the supply chain. Authorities cracked down on 'coal diversion,' a practice where trucks carrying coal were diverted illegally and their cargo swapped for a substandard product mixed with stones and other material. Stopping this practice was critical. The conveyor belts at the power stations repeatedly broke down because the stones damaged the belts, forcing the purchase of spare parts at substantial cost. The use of poor-grade coal also damaged the power station boilers, causing corrosion and other long-term damage.

South African power users themselves contributed meaningfully to the end of load-shedding. Years of severe blackouts forced businesses and households to take matters into their own hands, installing rooftop solar at record rates. This boom in private generation has removed over 6GW of demand from the national grid. That buffer gave Eskom the breathing room to carry out critical maintenance on its power stations without cutting supply.

This surge in private power, combined with better performance at its own plants, allowed Eskom to slash its massive diesel bill. Previously, frequent breakdowns at its coal stations forced the utility to burn diesel constantly just to keep the grid afloat. At the height of the crisis in the 2024 financial year, Eskom spent R33bn (US$1.98bn) on diesel. That expenditure has since dropped to R17bn (US$1.02bn) in the 2025 fiscal year.

Eskom’s transmission division has also been officially spun off into a standalone entity. The National Transmission Company of South Africa (NTCSA) now owns and manages the national grid. The NTCSA’s most urgent task is to expand the network. South Africa’s power grid was built to serve a centralised system of coal-fired plants concentrated in its north-eastern provinces. As the country transitions towards cleaner energy sources such as wind, solar and gas, its transmission network has become a critical bottleneck. The best renewable resources are located in the wind-swept Eastern Cape and the sun-rich Northern Cape, far from the main demand centres in Gauteng and other industrial hubs. The government has launched a programme to bring in private capital to accelerate grid expansion. The scheme aims to add 14,000km of new power lines.

Reliable power has contributed to greater business and investor confidence. After two consecutive quarters of decline, the Bureau for Economic Research Business Confidence Index rose five points to 44 in Q4 2025 – three points above its long-term average. While a 44% satisfaction rate implies it is too early to celebrate, the results suggest the economy is regaining momentum. The markets have responded accordingly. By the end of November 2025, the Johannesburg Stock Exchange Top 40 index was up 40% for the year. That same month, S&P Global Ratings gave South Africa its first credit upgrade since 2005, citing the turnaround at the national power utility. Eskom’s return to profitability removes the need for sovereign support, ensuring the Treasury remains on course for a third consecutive budget surplus.

References

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'Three things that helped Eskom stop load-shedding', Daily Investor, 17 May 2024

'South Africa’s Eskom records first full-year profit in eight years', CNBC Africa, March 2025

'Out of the darkness: The lasting economic costs of load shedding', FTI Consulting, 28 October 2025

'After 10 years of decline, has South Africa turned the corner?', Daily Maverick, 11 November 2025

'South Africa foreign currency rating raised to 'BB'', S&P Global Ratings, 14 November 2025

'The truth about Eskom’s diesel use', BusinessTech, 16 November 2025

'Too soon to pop the champagne on SA’s timeous recovery', News24, 17 November 2025

'Big turn for South Africa', BusinessTech, 10 December 2025

'Three men that brought Eskom back from disaster', MyBroadband, 14 December 2025