Power utility Eskom has set its sights on reducing the price of electricity in South Africa after making profit for the first time in eight years.
So said Mteto Nyati, Eskom chairman, yesterday in an exclusive interview with ITWeb. The price cuts are expected to provide much-needed relief to cash-strapped South African households and businesses.
Nyati is former Altron and MTN South Africa CEO. He was appointed as chairman of the power utility, which had been struggling to supply sufficient electricity to South Africa for a number of years.
Amid the power crunch, Eskom had to implement frequent load-shedding in order to avoid a total grid collapse. The state-owned company supplies over 90% of South Africa’s electricity needs.
At the time of his appointment, the industry said the instalment of tech personality Nyati was the “ideal choice” to lead troubled Eskom.
Now, Eskom has “turned the corner”, he said. Nyati’s latest comments come after he told ITWeb TV last year that South Africa was unlikely to experience load-shedding in 2025.
The announcement was met with scepticism, with some suggesting the end of load-shedding was timed to coincide with the national elections.
Now feeling vindicated, Nyati reflected on Eskom’s turnaround, saying: “I told you last year that we were turning the corner. People are surprised when they see that now Eskom is profitable; but to us, it’s a natural thing because we are no longer doing load-shedding; we are not using diesel; and government helped us in reducing the levels of debt and our interest payment.
“The combination of all of these things led us to profitability. It was a natural consequence of what we had been doing over the past three years.”
Diagnostic review pays off
In its financial results for the 2025 financial year ended 31 March, Eskom said implementing the turnaround strategy returned the state-owned company to profitability for the first time in eight years.
It reported profit before tax of R23.9 billion, to be invested back into the business for critical infrastructure and energy security.
Commenting on the financial results last month, Nyati said: “Eskom is increasingly a sustainable, investable company ready to compete in a liberalised, competitive energy market, and is very different from the crisis that in October 2022 the current Eskom board inherited when they took office.
“The comprehensive diagnostic review at the time reaffirmed Eskom’s strategic direction and highlighted the need to recalibrate execution timelines and intensify delivery against strategic objectives that we have supported the executive committee to deliver.”
Last week, the power utility announced the national power system remains stable, supported by sustained improvements in generation performance, a direct result of the ongoing implementation of the Generation Recovery Plan, “which continues to deliver positive outcomes across the fleet and overall energy security for the country”.
According to the utility, month-to-date, the unplanned capacity loss factor has declined to 22.05%, down from 24.77% during the same period last year – indicating a marked reduction in unplanned outages.
The country has gone over 150 consecutive days without load-shedding, with only 26 hours recorded between 1 April and 9 October.
What’s next?
“Now the next big thing is: ‘now that we are profitable, what about the price of electricity which is high?’ It’s a fair point,” said Nyati.
“That’s the next big thing the board is focused on right now – to make sure we reduce the cost of electricity going forward, but it’s not something that we are going to achieve overnight, just as we were not able to achieve the fixing of load-shedding overnight.
“However, the executive team has clear targets to take the costs out of Eskom – R112 billion over five years – that is our target.”
Nyati revealed that the goal is to ensure electricity price increases remain closely aligned with the Consumer Price Index (CPI).
“That’s the key thing but, of course, in some instances, the price of coal will be higher than the CPI, but our target and what we are saying to the team is that we must be aiming to be aligned with the CPI and at worst, price increases must just be a single digit.
“If you look at the historical price increases of Eskom, they have been double digits maybe for the last four years, and we cannot accept that.”
He also noted that while renewable energy sources are progressing well, their rollout is not happening quickly enough.
“We would want to see more of the deals that we signed in the past. We would like to see more renewables connecting to the grid but some of them are getting delayed. The good thing is that they are coming in,” he concluded.
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