By Lesedi Sibiya-Diplomatic Insider
Eskom registered an annual profit which had doubled to R30.3 billion for the financial year that concluded 31 March 2026.
Eskom has expressed that better coal fleet performance as well as the return of both Koeberg units had reduced its reliance on more expensive generation. Former Eskom executive manager and City Power senior executive, Vali Padayachee, stated that Eskom’s long-term sustainability depends on improved revenue collection.
Municipal debt which is owed to the power utility sits in the tens of billions of rands. “Sustainability now depends on shifting from state supported recovery to organic revenue collection, particularly by fixing the municipal debt crisis,” said Padayachee.
Padayachee did explain however that the municipal debt issue is not about local authorities not paying their electricity bill, but that many of these municipalities are caught in a structural trap, as they were affected by years of load shedding which has affected their ability to sell electricity while rising Eskom tariffs have impacted their margins.
He also stated that if Eskom takes over revenue collections that this will create drastic consequences for the power utility company. “Whilst direct collection could secure revenue for Eskom, it threatens to collapse the municipal model,” said Padayachee.
The city of Johannesburg cleared its R5.25 billion debt that was owed to the power utility company with City Mayor Dada Morero promising that the city of Johannesburg will remain committed to paying all outstanding accounts on time.
The City of Cape Town however, says it continues to look for cheaper alternatives even going as far as to venture into renewable energy, with the aim of reducing its reliance on Eskom entirely.
This week the city of Cape Town had announced that it had signed a two-major 20 year power purchase agreement worth R8 billion in order to purchase 70 megawatts of solar energy at rates 19% to 21% cheaper than the current tariff allocated by Eskom.
Padayachee explained that Eskom will need to find ways to adapt to the fall of electricity demand and sales.