South Africa’s state-owned power utility has asked the electricity regulator, NERSA, for permission to raise prices by 36% in its 2026 financial year, far exceeding inflation in the continent’s most industrialised economy.
In its submission, Eskom told the National Energy Regulator of SA that it sought the hike because prior increases had been “inadequate” for its financial needs. The nation’s annual inflation rate for August was 4.4%.
South Africa has grappled with rising electricity costs that have roughly tripled over the past 14 years.
The cash-strapped utility, which amassed R400 billion in debt, has benefited from multiple bailouts from the National Treasury to keep its power plants running.
Conditions of that support mean that the loss-making company can’t take on additional loans.
The company, which is responsible for most of South Africa’s power provision, has for years struggled to provide consistent electricity supply, crippling businesses and economic growth.
While the country has now gone for more than 177 days without power cuts, record blackouts last year prompted many rich households and businesses to spend thousands of Rands each on clean-energy solutions.
Eskom has made its revenue application based on the costs it will incur to efficiently provide electricity to the customer.
It is a critical component in ensuring Eskom continues to provide reliable electricity services while improving its financial sustainability.
The utility has applied for an 11.8% increase in fiscal 2027 and 9.1% in 2028.
Eskom said, “Although government’s debt support assists with liquidity requirements, it does not adequately enhance our long-term financial sustainability.”
The government, through the minister of finance, has stressed that Eskom needs to migrate towards cost-reflective tariffs that will make it sustainable.
The government has also said that it will not continue providing support beyond its current guarantee, leaving the power utility to apply for the above-inflation tariff increases.
Source: https://energynewsafrica.com