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Eskom lost R23 billion to theft by Bianke Neethling
Eskom lost an estimated R23 billion to theft, which amounts to 13.9 terawatt-hours (TWh) of electricity. This problem is partly self-inflicted, as the utility’s high prices and weak financial management contribute to the challenge.
The utility’s results for the six months through September 2024 revealed that Eskom’s revenue was R183.71 billion, an almost 16% increase from the comparative half-year period.
The company’s profit for the six-month period was R17.83 billion – up over 1,000% from the R1.61 billion it recorded in 2023.
However, the utility faces a significant problem. Its high prices drive an increasing number of people to turn to alternative solutions or even illegal connections to access electricity.
Since 2007, electricity prices in South Africa have risen by 927%. In 2024, Eskom applied to increase tariffs even further by 36% in the 2025/26 financial year.
Electricity and Energy Minister Kgosientsho Ramokgopa explained that Eskom’s electricity generation cost has risen significantly over the past two decades.
“When adjusted for inflation, these costs have escalated, contributing to higher tariffs for consumers,” he said.
For example, in 2014, a typical Eskom customer using around 800 kWh per month paid approximately R1,055.40.
By 2024, the same amount of electricity cost about R2,948.98. This is more than double what it cost 10 years ago.
The minister said this significant increase reflects nominal increases and underlying cost pressures.
While the National Energy Regulator of South Africa (NERSA) did not grant Eskom’s proposed tariff hikes, South Africans will still face above-inflation increases for the next three years.
The regulator approved a 12.7% increase in Eskom’s electricity tariffs for the 2025/26 financial year.
This equates to an allowable revenue of R384 billion, which is significantly less than the 36.15%, or R446 billion, that Eskom requested.
In addition, NERSA announced that it approved the following tariff hikes for the next two years:
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2026/27 – allowable revenue of R409 billion, translating into a 5.36% increase
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2027/28 – allowable revenue of R435 billion, translating into a 6.19% increase
The 12.7% increase for the 2025/26 financial year will come into effect on 1 April 2025.
Energy analyst Chris Yelland previously warned that high electricity prices are one of Eskom’s biggest threats.
As Eskom’s prices rise and become increasingly unaffordable for South Africans, demand for the utility’s electricity will decrease.
This is either because citizens resort to alternative energy solutions like rooftop solar or turn to illegal means of obtaining electricity.
“The consequences to Eskom are increasing levels of non-payment by municipalities who can’t collect the money from people who can’t afford to pay, as well as debt and non-payment,” Yelland warned.
The Bureau for Economic Research (BER) said in a recent press release that Eskom lost 13.9 TWh of electricity due to theft, leading to a revenue loss of around R23 billion.
Illegal connections have plagued Eskom for years. They occur when individuals or groups bypass the official electricity supply network to access power without authorisation or payment.
This often involves tampering with infrastructure such as transformers, meters, or distribution lines.
This poses a significant problem for the utility, which South Africa’s Auditor-General also pointed out in her recent report.
The Auditor General (AG) said Eskom is in serious financial trouble, with R57 billion in operating losses and current liabilities exceeding current assets by R50 billion.
One of the many issues the AG pointed to in her report is significant electricity losses due to illegal connections, ghost vending, and illegal token sales.
She also noted serious flaws with Eskom’s prepaid meters, which have resulted in the inability to determine the full extent of illicit prepaid tokens created.
“Simply put, weak financial management at Eskom persists. Ongoing improvements to governance, including ensuring that prepaid meters are not open to fraud, will improve financial performance,” the BER said.
In December 2024, Police Minister Senzo Mchunu highlighted the problem electricity theft poses to Eskom and the country.
In response to a Parliamentary question, he revealed that 1,111 persons were arrested and prosecuted for illegal electricity connections during the 2022/23 financial year.
Eskom’s senior manager for maintenance and operations, Mashangu Xivambu, also previously explained the extent of this problem in Eskom’s operations.
“Eskom is losing a lot of money that we were supposed to use to maintain our plants, making sure we create an infrastructure that will ensure people have reliable electricity,” Xivambu told Businessday
He added that illegal connections cause network faults, and customers switched off during load-shedding suffer unscheduled outages.
However, illegal connections also lead to operational challenges for the utility.
Illegal connections overload the grid, especially in areas where infrastructure is not designed to handle the additional demand.
They add unforeseen electricity demand, making Eskom’s job of managing the grid more complex than necessary.
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