Minister of Electricity and Energy Kgosientsho Ramkogoppa presented the 'Eskom 2.0' strategy, according to which the energy company must improve its financial sustainability and eliminate inefficiencies without relying on state aid or significant tariff increases.
Ramkogoppa stated on Friday the government's expectations for 'Eskom 2.0'—a large-scale repositioning of the state-owned company following improvements in power generation and reduced power outages.
A central element of this plan is the requirement for Eskom to become financially self-sufficient while simultaneously lowering the cost of energy supply and preparing for increased competition in South Africa's liberalized electricity market.
Ramkogoppa emphasized that shareholders expect financial stability from Eskom, enabling it to meet its obligations without using further fiscal support or maintaining double-digit tariff growth as a business model. He categorically stated: 'There will be no state bailouts. There will be no double-digit increase in electricity tariffs in this country. It will not happen. And Eskom must prepare for this.'
Requirements for reducing inefficiencies at Eskom
Ramkogoppa noted that the cost of electricity remains a serious problem for businesses, households, and industrial competitiveness in South Africa. He specified that Eskom, which still accounts for the majority of generation in the country, must reduce technical losses, revenue leakage, and overall inefficiency so that consumers see relief.
The Minister called for moving from talk to action regarding electricity costs, expressing understanding of citizens' problems and giving a full guarantee of their resolution. It should be noted that Eskom reported a second consecutive annual profit for the financial year ending March 2026, citing improved operational performance and cost discipline that strengthened its financial position.
Nevertheless, Ramkogoppa warned that the future sustainable development of Eskom will depend on reducing losses and improving revenue collection, rather than the state or consumers covering its expenses. The board of directors is expected to develop a strategy aimed at combating electricity theft, inaccurate metering and billing, technical losses, and weak collections.
The Minister stipulated that Eskom must lower the cost of energy supply by improving the productivity of facilities, procurement, maintenance, project implementation, and workforce efficiency. He added that the intention to reduce electricity costs will not be realized until Eskom can solve the inefficiency problems.
Future plans include a major expansion of the national grid, which must be supported by Eskom and the South African National Transmission Company as more independent generation sources are connected. Ramkogoppa announced government plans to build 14,500 kilometers of new transmission lines, a program estimated at approximately 440 billion rand. He stressed that this program should stimulate local production and employment, rather than heavily relying on imported equipment.
The Minister also noted that Eskom must look beyond South Africa, as new private generators weaken its traditional dominance in the domestic electricity market. He welcomed increased competition, warning against the risks of complacency and inefficiency associated with monopolies, which can drag the country down.
The government wishes Eskom to utilize surplus generating capacity to increase electricity exports to South Africa while developing new domestic demand from sectors such as data centers. The new strategy must also clearly define positions on nuclear energy, gas, renewable energy, and the future coal fleet.
Ramkogoppa stated that Eskom Green should create a credible portfolio of projects, and the company itself must make artificial intelligence a central part of its operations. The Minister insisted on aggressively developing Eskom's AI capabilities, pointing out that immediate applications include reducing technical losses, improving weather and demand forecasting, and strengthening grid visibility.
The government expects Eskom's board of directors to present a unified 'Eskom 2.0' roadmap for a period of three to five years, covering the company's public mandate, commercial position, and investment program. This plan was developed after Eskom achieved 365 days of continuous operation without power outages in May 2026 and subsequently reported a second consecutive profit. However, Ramkogoppa cautioned that maintaining the supply of electricity is no longer the sole measure of success, as electricity costs could rise if the required management is not implemented.
