CHAMWE KAIRA
Eskom, where Namibia imports the bulk of its electricity, says it has made significant progress in recovering from South Africa’s energy crisis, with improved generation performance, stronger finances and a sustained reduction in load shedding, but has warned that municipal debt remains a major threat to its long-term sustainability.
The Eskom Group reported revenue of N$354.7 billion (2025: N$340.9 billion), profit before tax of N$39.4 billion (2025: N$21.9 billion restated) and profit after tax of N$30.3 billion (2025: N$14 billion restated).
Cash generated from operations increased to N$104.4 billion (2025: N$93.4 billion), while cash and cash equivalents amounted to N$124.9 billion at 31 March 2026 (2025: N$63.8 billion).
In its 2026 integrated report, Eskom said South Africa experienced only four days of load shedding during the year under review, with no load shedding in the second half of the year.
This culminated in 365 consecutive days without load shedding on 15 May 2026.
Generation plant availability improved to 65.16% from 60.60% previously, while the generation fleet has recently recorded daily energy availability above 82%, its strongest performance since 2017.
Eskom attributed the improvement to targeted maintenance, the Generation Reliability and Sustainability Plan and the return of key generating capacity.
The utility also said reduced reliance on expensive open-cycle gas turbines cut fuel costs by about N$10.6 billion during the year.
Eskom’s financial position also improved, with the utility reporting a second consecutive year of strong profitability, improved liquidity and positive credit-rating actions from S&P Global, Fitch and Moody’s.
It said the government’s debt relief programme had been an important enabler by freeing operational cash for reinvestment.
However, municipal arrear debt has emerged as one of Eskom’s most pressing challenges. The debt reached N$119.9 billion by June 2026, according to Group Chief Executive Dan Marokane.
“Municipal arrear debt remains the single greatest threat to our financial sustainability,” Marokane said.
Eskom said persistent municipal non-payment was eroding its revenue, cash flow and liquidity and was also creating an obstacle to the legal separation of its Distribution business.
The utility is pursuing distribution agency agreements and legal processes while supporting National Treasury interventions against non-compliant municipalities.
The City of Johannesburg settled its arrears in full in August 2026, while the Eskom Restructuring Task Team has proposed a dedicated workstream to develop structural solutions to municipal debt.
At the same time, Eskom faces declining electricity sales. Sales volumes fell 6.2% to 178 TWh in the 2026 financial year, driven by weak industrial demand and increased embedded self-generation.
The closure of the Mozal aluminium smelter for care and maintenance in March 2026 further reduced demand.
Eskom said surplus capacity of about 2–3 GW had created an opportunity to grow revenue through industrial customers, data centres, wheeling, cross-border sales, electric-vehicle charging and renewable energy offerings.
The utility also connected more than 67 500 households to the grid during the year and is targeting the elimination of load reduction nationally by March 2027.
