This blog answers a query on Eskom’s tariff increases and cash-positive timeline in the medium to long term.
The chance of a full 12% tariff increase by Eskom in 2026 is extremely unlikely considering NERSA’s previously approved tariff increases for 2026/27 and Afriforum’s legal win and NERSA’s R54 billion error adjustment. NERSA has cut Eskom’s request from 36% to 12.74% for 2025/26, with planned increases of 5.36% for 2026/27 and 6.19% for 2027/28, both lower than past hikes. Legal and regulatory pressures like Afriforum’s will likely keep these increases subdued.
However, from 2027 onwards, rising wage costs, infrastructure expansion, government ending bailouts, and municipal arrears growing from R103 billion to R300 billion by 2030 will push tariffs sharply higher.
YearProjected IncreaseKey Drivers
2026~5.4%NERSA cap, legal challenges
2027~6.2%Wage pressures, network upgrades
2028≥9%End of bailouts, arrears surge
202910-12%Debt, infrastructure, wage hikes
203010-15%Massive arrears, free electricity
Short-term increases are constrained, but without addressing arrears and funding issues, double-digit hikes will return by 2028.
Assumptions:
- Municipal arrears exceed R300 billion.
- Wage settlements outpace productivity.
- Political and regulatory delays hinder tariff reform.
- Infrastructure underfunded; rising technical and criminal losses.
- Electrification expansion unfunded, straining cash severely.
Eskom remains cash negative past 2030, requiring bailouts or restructuring, risking asset sales or break-up.
Municipal debt recovery, operational efficiencies, tariff reform, wage controls, and full infrastructure funding are essential for recovery.
Sources: NERSA , Eskom, Afriforum, BusinessTech, Reuters, EnergyNews