Eskom gets green light for 12.7% tariff hike – far less than requested

South Africa’s energy regulator allowed state-owned Eskom to raise electricity tariffs by 12.7%, well below the amount requested by the debt-laden utility that’s trying to turn around its finances.

The adjustment is a fraction of the 36% increase that Eskom asked for from the National Energy Regulator of South Africa. The utility had increases approved for three financial years: 12.7% for the year to March 2026, 5.36% for 2027 and 6.19% for 2028, the Pretoria-based regulator said in an online briefing on Thursday.

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Eskom, the recipient of a R250 billion ($13.5 billion) government bailout, asked the regulator to raise tariffs by more than a third to avoid having to ask for more state funding. It’s blamed the state’s inability to rein in delinquent municipalities and errors made by the regulator in adjudicating earlier tariff-increase applications to boost prices.

Read: South Africa’s 36.1% electricity price hike for 2025

The power utility has long pursued cost-reflective tariffs to offset increases in primary energy costs, including the coal it relies on to generate more than 80% of South Africa’s electricity. Eskom’s request drew criticism from civil-society groups, municipalities and Electricity Minister Kgosientsho Ramokgopa, who said it would undermine economic growth and deepen poverty in one of the world’s most unequal nations.

Eskom has succeeded in stabilising national energy supply since March, after years of frequent outages caused by breakdowns at its poorly maintained coal-fired power plants. Chief Executive Officer Dan Marokane, who took office in March 2024, is looking to grow the business including through an expansion of its renewable-energy assets.

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Still, the financial viability of the utility remains at risk unless Eskom addresses cuts costs and addresses growing payment arrears from municipalities, the Auditor-General of South Africa said on Wednesday. It also warned that higher electricity tariffs could increase demand for illegal supply and vouchers.

© 2025 Bloomberg

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