Investors Rally Behind Eskom’s Turnaround as Utility Posts R24.3 Billion Profit and Ends Load Shedding Woes
By Nkosana Khumalo
Johannesburg – Signs of a brighter future for South Africa’s power giant Eskom are sparking fresh hope among investors, with the company’s credit risk dropping sharply and trust in its recovery plan on the rise. Over the past two years, Eskom’s credit default swap spread has narrowed significantly, showing that global money managers now see less chance of default.
This comes as the utility stabilises electricity supply, nearly wipes out load shedding, and reports its first major profit in years – a whopping R24.3 billion after tax for the six months ending September 2025.
Backed by higher sales and strict spending controls, these wins are lifting spirits in the bond market and could mean cheaper loans ahead. As Eskom gears up to borrow more for grid upgrades and clean energy shifts, its progress is key to the nation’s economic health, especially with growth stuck at a low 0.4% in the third quarter of 2025.
The turnaround is no small feat for a company that once dragged down the economy with blackouts and debt piles. Now, with reliable power flowing and finances looking up, investors are betting on Eskom to keep delivering.
This renewed faith ties into broader government efforts, like the Integrated Resource Plan 2025, which maps out investments for a stronger energy setup. For everyday South Africans hit by past outages and high bills, it means fewer disruptions and a step towards steady jobs and growth.
Eskom’s Financial Rebound: From Losses to R24.3 Billion Profit
Eskom’s latest results paint a picture of real change. For the half-year to September 2025, the utility turned in a profit after tax of R24.3 billion, a massive jump from years of red ink. This is its first solid profit in eight years, driven by smarter operations and cost cuts. Revenue climbed thanks to better sales, while tight controls on spending helped plug the gaps. The company also cleared up old issues, like reducing unauthorised costs to zero in recent audits, showing a focus on clean books.
This financial boost follows a tough stretch where Eskom bled money from breakdowns and fuel hikes. Now, with plants running smoother, the utility is saving on diesel – a big expense during peak blackout times.
Leaders credit the recovery plan, which fixed key stations and boosted maintenance. Electricity supply hit 96% reliability for the 2024/25 financial year, climbing to 98% so far this year. That means homes and factories get power when they need it, cutting losses for businesses and easing life for families.
The profit news has rippled through markets, with Eskom’s bonds trading stronger. Lower borrowing costs could save billions, freeing cash for fixes like new lines or wind farms. Cabinet gave a nod to these gains in early December 2025, welcoming the steady improvements as a win for the whole country.
Narrowing Credit Risks Signal Growing Investor Trust
One clear sign of better days is Eskom’s falling credit default swap spread – a measure of how risky lenders see the company. Over two years, this gap has shrunk a lot, meaning investors think Eskom is less likely to miss payments. This drop reflects faith in the turnaround, from ending blackouts to stronger finances. Global players, watching from afar, now view Eskom as a safer bet, which could open doors to more funding at lower rates.
This trust boost comes amid wider market cheer. South Africa’s recent $3.5 billion global bond sale in December 2025 drew huge demand – over $13 billion in bids – at cheaper rates than before. Part of that success links to Eskom’s progress, as stable power underpins economic plans. The utility’s credit rating got a lift too, though it stays below investment grade for now. Experts say if gains hold through 2026, confidence could grow even more, helping attract cash for big projects.
Eskom’s bonds are also perking up locally, with yields falling as buyers snap them up. This matters because lower costs mean more room in the budget for grid growth and renewable ties. The company plans to raise fresh capital soon, eyeing expansions to handle more solar and wind power. With debt still high at over R400 billion, these steps are vital to keep things sustainable.
End of Load Shedding and Operational Wins Drive Recovery
Load shedding, once a daily headache for millions, is now mostly a thing of the past. Eskom has gone months without planned cuts, thanks to fixed plants and smarter energy use. This stability stems from the recovery plan, which ramped up repairs and cut downtime. Key stations like Kusile and Medupi are back online, pushing output higher and reliability to new levels.
The utility’s operational performance shines in the latest half-year report. Plants ran better, with fewer breakdowns and more power on tap. Diesel use dropped sharply, saving billions that once went to emergency generators. This shift not only steadies the lights but also cuts pollution, aligning with global green pushes.
Government backing helps too. In December 2025, the energy minister approved the next phase of Eskom’s unbundling – splitting into generation, transmission and distribution arms. This move aims for better service, more competition and clear rules to draw private cash. It boosts investor certainty, making it easier to fund the shift to renewables. The Integrated Resource Plan 2025 lays out a clear path, calling for big investments in grids and clean sources to meet rising demand.
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