Eskom’s Best Grid Year in Six Comes With a US$187 Million Caveat

SOUTH AFRICA · ENERGY

Eskom diesel spending has fallen 82.38% this financial year to R1.04 billion (about US$65 million), and plant availability is the highest in six years, the utility said on Friday. A day earlier it conceded about R3 billion (about US$187 million) in payments made outside contractual terms to three diesel suppliers.

Rand conversions in this piece use the South African Reserve Bank’s rate of R16.01 per US dollar on 25 August 2026.

The operating numbers behind lower Eskom diesel spending

In a statement dated Friday 28 August, Eskom said its year-to-date energy availability factor had reached 67.87%. That is the share of time its plants are able to generate, and the reading covers 1 April to 27 August 2026.

It is the highest year-to-date figure since 5 October 2020. A year earlier the same measure stood at 60.9%, so the gain is 6.97 percentage points.

Unplanned outages fell 7.84 percentage points to 19.58% of capacity. Average unplanned outages have dropped by 6,873MW over three years, from 16,130MW to 9,257MW, roughly the combined output of the Medupi and Kriel stations.

Eskom also reported 469 consecutive days without load shedding, the rolling power cuts South Africans use to describe rationed electricity. Seven of nine provinces are now free of load reduction, the localised cuts used to protect overloaded township networks.

Diesel was the expensive symptom, and it is receding

The diesel line is the clearest financial read on all of this. Expenditure fell to R1.04 billion (about US$65 million) from R5.93 billion (about US$370 million), a decline of 82.38% and a saving of R4.89 billion (about US$305 million) year on year.

The open-cycle gas turbines that burn that diesel ran at a load factor of 1.10%, against 8.27% a year earlier. Eskom said diesel spending has fallen R23.0 billion (about US$1.44 billion) between March 2023 and March 2026.

Every one of those figures is Eskom’s own and unaudited by any outside party. The utility also noted 509,515 smart meters installed against a target of 577,347 in high-priority areas.

The governance admission that landed the same week

On Thursday night Eskom issued a separate seven-page statement on its investigation into diesel procurement contracts. It conceded about R3 billion (about US$187 million) in payments made outside contractual terms to three suppliers during early 2025.

The payments came during a return of load shedding, when load shedding reached stages 3 to 6 over 13 days between late January and early March 2025 and the utility was scrambling to keep diesel flowing. Eskom said earlier advance payments under a previous contract may have made the practice look like an available mechanism.

Chief executive Dan Marokane said operational pressure “does not diminish our obligation to comply fully” with internal controls. Independent verification found no missing diesel, and the legal review did not sustain allegations that the contract award itself was compromised.

The same statement disclosed a second, larger matter. Eskom’s Loss Control Function identified about R38 billion (about US$2.37 billion) in irregular expenditure in June 2026 under the previous fuel contracts concluded in 2019, again involving spending without the required approvals rather than established financial loss.

Both matters have been reported to external auditors and to National Treasury. Eskom has also referred certain matters to the Hawks, the police unit for priority crimes.

Now the utility wants investigators of its own

Business Day reported on Saturday that Eskom is hiring specialist investigators to infiltrate the cartels behind coal and diesel theft. The tender scope covers covert and overt investigations, intelligence gathering, surveillance, asset tracing and litigation support.

Eskom spends more than R70 billion (about US$4.37 billion) a year on coal and diesel, according to the same report. It said the sophistication of organised criminal networks now exceeds what internal resources can handle.

Separately, the Supreme Court of Appeal this year ordered Eskom to release its coal and diesel contracts to the civil society group AfriForum. Eskom had argued the contracts were commercially sensitive, and the court rejected that case.

Why both stories matter to anyone holding South African risk

Eskom is the single largest counterparty in the South African economy and a benchmark bond issuer in its own right. Grid availability feeds directly into every growth and currency forecast for the country.

So the operating improvement is real money for investors, not public relations. A structurally lower diesel bill changes the utility’s cash profile and, by extension, the sovereign guarantee story.

The governance file cuts the other way. A R3 billion (about US$187 million) concession on procurement discipline, alongside a R38 billion (about US$2.37 billion) irregular-expenditure disclosure, is the kind of news that widens spreads even when the plants are running well.

One caveat sits inside Eskom’s own release. Availability for the week of 21 to 27 August was 69.41%, slightly below the 70.13% recorded in the same week a year earlier, mainly because of heavier planned maintenance.

Eskom has not said when the investigator procurement will conclude, and no tender value has been published. Nor has it named the three diesel suppliers involved in the payments it conceded.

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