The truth behind how Eskom went from zero to hero

Eskom has created a template for how to rescue a failing state-owned enterprise (SOE), with the utility’s operational performance having significantly improved since 2023. 

The utility is expected to hit its target of a 70% energy availability factor (EAF) for its entire fleet this year, with eight of 14 power stations already above this level. 

Crucially, this has also translated into an improved financial performance at the utility, with it forecasting its first mid-year profit in years. 

This is feedback from Electricity Minister Kgosientsho Ramokgopa, who outlined how Eskom managed to turn itself around in the past few years. 

Eskom’s turnaround has been impressive, with it recording an EAF of 48% in early 2023. Just over two years later, its EAF is sitting at 64%. 

Eight of the utility’s 14 power stations are operating with an EAF above the target of 70%, and one is operating at 91%. 

This improvement is one of the major reasons why load-shedding has become significantly less severe in South Africa and is considered a thing of the past for some. 

Coupled with significant investment from private companies and households in alternative energy sources, load-shedding has been kept at bay for all of winter so far in 2025. 

“Of course, it was a collective effort. I think we have designed a template on how to resuscitate and rescue ailing SOEs in South Africa,” Ramokgopa told Newzroom Afrika.

“Obviously, the nuances will be different moving from one SOE to the other, with each having a unique mandate and some specific challenges. But all have high-level problems that are similar.” 

Eskom’s downfall was characterised by widespread mismanagement and corruption, which not only prevented new capacity from coming online but also caused existing power stations to fail. 

The utility has some of the oldest power stations in the world, with an average age of 41 years. Its coal-fired power plants have a maximum design life of 60 years. 

This has resulted in significant energy losses due to deteriorating equipment, with some units having to be shut down for safety reasons. 

The lifespan of power stations can be extended, and old plants can run efficiently, but this requires increased maintenance expenditure – something which was not done over the past decade. 

The graph below, courtesy of the Organsation for Economic Co-operation and Development, illustrates the steady decline in electricity generated by Eskom, accompanied by a dip in capital expenditure on maintenance.

Eskom’s revival

Ramokgopa laid out some basic principles that have driven Eskom’s turnaround and form the basis of a template that can be used to save other SOEs. 

“I think the first key principle is competent leadership at both a board level and within the management team,” Ramokgopa said. 

The crucial factor here is that Eskom’s board and management team includes several individuals with immense experience in the electricity sector, with knowledge of how the utility ran when it was the best electricity provider in the world. 

“At the board level, we have Mteto Nyati at the top and a competent set of men and women with exceptional credentials, who have cut their teeth in the electricity sector,” Ramokgopa said.

These individuals, who have knowledge of the electricity sector, are coupled with business leaders who have been successful in operating complex organisations. 

“They understand the issues of governance and how you steer an organisation the size of Eskom into calmer waters and out of a period of turbulence,” the minister explained. 

These leaders are also crucial in directing Eskom’s resources towards the right endeavours and renewing organisational morale and good work ethic. 

“At the administrative level, you must get individuals who are technically competent and who can be trusted to run power plants,” he said. 

Ramokgopa said that in the past Eskom was misdirected when it had individuals at the helm who did not have an apprecition of how to run a utility of this nature.

The second element of the turnaround plan was cleaning up the mess left by years of mismanagement and reimposing the correct operational procedures, from running power stations to financial management. 

Ramokgopa said enforcing consequence management is a central part of this. This means putting the right people in the right jobs and holding them accountable. 

This had to happen throughout the organisation, from the executive level down to power station managers and engineers. 

It does not only refer punishment and discipline, but also rewarding individuals who are performing well and doing the right things. 

This also naturally improves morale and begins to fix the incentive structure at Eskom, with positive outcomes being reinforced. 

The third key pillar is addressing corruption and crime at the utility, which is partly tackled through the appointment of competent leadership. 

“You have to address the challenges around corruption, malfeasance, and crime to hold those who soil the good work Eskom does to account,” Ramokgopa said. 

“They have to be called to order and put through the necessary processes.”

Ramokgopa said the utility aims to reach the 70% EAF target across its fleet by the end of the current financial year, and all indications are that Eskom is heading in the right direction.