State-owned power utility Eskom has outlined an ambitious capital expenditure plan totalling R343 billion over the next five years, signalling a strategic pivot towards financial sustainability and operational excellence. This significant investment, detailed by Eskom Chief Financial Officer Calib Cassim to parliament’s electricity and energy committee, underscores the utility’s commitment to modernising South Africa’s energy infrastructure and ensuring a reliable power supply.
The capital allocation is strategically divided across key areas: R167 billion is earmarked for enhancing financial and operational stability, R138 billion for modernising the power ecosystem, R24 billion to facilitate a just and inclusive energy transition away from coal, and R14 billion to solidify Eskom’s leadership position within the energy sector.
Specific annual expenditures include R55 billion in 2026/27, rising to R78 billion in 2029/30, before a slight decrease to R73 billion in 2030/31 .
Breaking down the investment further, the National Transmission Company of South Africa (NTCSA) is projected to require R157 billion over the five-year period, with generation assets demanding R126 billion and distribution networks R38 billion. This substantial outlay is intended to bolster the entire electricity value chain, from power generation to its delivery to consumers .
Crucially, Eskom anticipates a period of reduced reliance on external capital markets. Cassim indicated that the utility would not need to raise capital in the 2027 financial year, instead funding its capital expenditure through a combination of existing liquidity and cash generated from operations. However, the utility expects to secure R13 billion from development finance institutions over the next five years and plans to raise R25 billion annually on capital markets between 2028 and 2030. The final tranche of the government’s R254 billion debt relief package is scheduled for 2029, after which direct government support is expected to cease .
Eskom’s financial projections paint a picture of improving health, with profit before tax forecast to reach R30 billion in the 2027 financial year, climbing to R51 billion by 2031. Concurrently, the utility aims to achieve R112 billion in savings over the next five years, reflecting a concerted effort to enhance efficiency and cost-effectiveness. These financial targets are integral to Eskom’s broader strategy for long-term sustainability and its pursuit of further credit rating upgrades .
The utility’s financial strategy rests on four fundamental pillars: a reduction in balance sheet debt, significantly aided by the government’s debt relief; ensuring revenue security through improved sales volumes and appropriate tariff adjustments; diligently reducing municipal debt, which stood at R111 billion at the end of March, an increase from R95 billion in March 2025; and extracting greater efficiencies from its assets to guarantee a consistent and reliable electricity supply .
Cassim highlighted a shift in Eskom’s strategic focus, moving from a recovery-oriented approach to one centred on competitiveness and customer centricity. This new direction encompasses market reforms, enhanced distribution reliability, and the elimination of load reduction, all contributing to a more responsive and customer-focused Eskom. The utility aims to achieve a 70% energy availability factor (EAF) by the 2027/28 financial year, a notable increase from the 66.6% recorded in March, and to ensure its coal-fired power stations comply with minimum emission standards beyond 2030 .
Future objectives also include accelerating the transition to cleaner energy sources, with plans to catalyse 2,000MW of construction-ready renewable projects by 2027 and develop 5,500MW by 2031. Furthermore, Eskom intends to deliver 1,500MW of gas-fired generation by 2029, scaling up to 3,000MW by 2031. Significant investments are also planned for transmission and distribution infrastructure, including commissioning 8,362km of transmission lines and 82,415MVA of transformer capacity by 2031, alongside substantial upgrades to the distribution system .
Technological advancements are also a key component of Eskom’s strategy, with plans to roll out 5.4 million smart meters by 2028. The utility is also committed to supporting the revenue management and billing system for a new online vending system and digital procurement projects by the same year. These initiatives aim to modernise operations and improve service delivery. Members of Parliament were informed that the stability of the electricity system has markedly improved, evidenced by over 320 consecutive days without load-shedding, a significant milestone for the embattled utility .