Eskom doubles profit to $1.9 billion as South African cities’ unpaid power bills approach $7 billion

The state-owned utility reported net income of approximately $1.9 billion (R30.3 billion) for the year ended March 2026, compared with R14 billion in the previous financial year.

It was Eskom’s second consecutive profit after almost a decade of losses.

The financial improvement came during a year in which the utility’s average electricity tariff increased by 12.7%, while improved performance at its power stations reduced the need for rolling blackouts.

South Africa experienced only four days of load shedding during the financial year, compared with 329 days in 2024, Reuters reported⁠.

The reduction allowed Eskom to sell electricity more consistently and spend less on emergency measures. It also helped businesses avoid some of the production losses and generator expenses associated with prolonged outages.

However, customers purchased less electricity despite the improved supply.

Sales volumes fell 6.2%, suggesting that higher prices, private solar installations, energy efficiency and weak economic activity are changing electricity demand.

The published results do not establish how much of the decline came from each factor.

The cities that collect but do not pay Eskom

Municipal debt rose to approximately $6.9 billion (R111.6 billion).

Many South African municipalities purchase bulk electricity from Eskom, resell it to homes and businesses and are expected to transfer the utility’s share of the revenue.

Eskom says some municipalities continue collecting money from customers without paying their full accounts.

The company has already threatened to reduce electricity supplies to Johannesburg after its dispute with the city and City Power reached approximately $408 million.

Without significant intervention, Eskom expects municipal debt to climb to about $22.2 billion (R358 billion) by 2031. That would place it at roughly the same level as the utility’s current gross debt of approximately $22.1 billion.

Municipal and metropolitan customers account for more than 40% of Eskom’s electricity sales, making the unpaid bills a national rather than local problem.

Eskom’s improved position also reflects government support. South Africa approved a multiyear debt-relief package intended to allow the utility to invest in maintenance while reducing its borrowing burden.

The profit therefore does not mean Eskom’s underlying financial problems have disappeared. Customers are using less electricity, coal stations still require extensive investment and municipalities owe an amount capable of eroding the turnaround.

The contrast is particularly significant for ordinary consumers. Households and businesses are paying higher tariffs while the debts accumulated by local authorities continue weakening the company supplying their electricity.