- Eskom has requested a 36% electricity price increase for 2026, citing previous hikes as insufficient to meet financial needs amid an inflation rate of 4.4%.
- With R400 billion in debt, Eskom relies on government bailouts but is urged to implement cost-reflective tariffs for long-term financial sustainability.
South Africa’s state-owned power utility, Eskom, has requested approval from the National Energy Regulator of SA to increase electricity prices by 36% for its 2026 financial year, significantly surpassing the country’s current inflation rate of 4.4%. Eskom argues that previous price hikes have not met its financial requirements.
The utility, which has faced soaring electricity costs that have tripled over the past 14 years, is grappling with R400 billion in debt and has relied on multiple government bailouts to maintain operations. However, conditions attached to this financial support prevent Eskom from taking on additional loans.
Despite over 177 days without power cuts, Eskom has struggled to provide a reliable electricity supply for years, impacting businesses and economic growth. In response to last year’s severe blackouts, many affluent households and businesses invested heavily in clean energy solutions.
Eskom’s revenue application is based on the costs necessary to deliver electricity efficiently. It is vital to ensure the utility can provide consistent services while enhancing its financial stability. Eskom also seeks an 11.8% increase for fiscal 2027 and 9.1% for 2028.
While government debt support has helped with liquidity, officials have stressed the need for Eskom to adopt cost-reflective tariffs for long-term sustainability. The government has indicated it will not extend support beyond current guarantees, pushing Eskom to pursue above-inflation tariff increases.
Eskom’s financial challenges come as the utility is under increasing pressure to modernise its infrastructure and enhance service reliability. As it seeks substantial tariff increases, consumers and businesses are growing concerned about the affordability of electricity. Eskom’s future hinges not only on regulatory approvals for these price hikes but also on its ability to implement effective strategies for reducing debt and improving operational efficiency.