The South African government is set to intervene in Eskom’s proposed 36.15% tariff increase, aimed at covering rising electricity production costs. This announcement was made by Electricity Minister Kgosientsho Ramokgopa during his keynote address at Standard Bank’s 4th Annual Climate Summit in Johannesburg.
Speaking at the event, Ramokgopa acknowledged Eskom’s application to the National Energy Regulator of South Africa (Nersa), which seeks permission to hike electricity prices by 36.15% for the period of April 2025 to March 2026. The increase, Eskom claims, is necessary to meet growing financial demands. However, Ramokgopa assured attendees that the government is exploring ways to cushion the blow for consumers.
Some measure of relief
“There could be a policy intervention we could make to provide some measure of relief,” said Ramokgopa. He expressed confidence that the government would act before Nersa delivers its final ruling on Eskom’s application later this year. The proposed increase far exceeds the current inflation rate, which stood at 4.4% in August, raising concerns about its potential impact on households and businesses already grappling with high living costs.
Eskom’s request for the tariff hike forms part of its Multi-Year Price Determination (MYPD) plan submitted to Nersa. The utility is seeking total revenue of R446 billion for the 2026 financial year, R495 billion for 2027, and R537 billion for 2028. The steep proposed increase is primarily driven by the high costs of electricity generation, much of which is tied to the utility’s aging coal plants and ongoing operational challenges.
Ramokgopa’s address at the summit also touched on broader energy issues, including the government’s commitment to a Just Energy Transition. He highlighted the need for a concerted effort to integrate renewable energy sources into South Africa’s energy mix. “We need about R1.5 trillion to achieve the kind of ambition we’ve set for ourselves,” Ramokgopa noted, stressing the importance of private sector involvement in funding and supporting the country’s transition to a low-carbon economy.
Climate change and energy matters
Standard Bank, the host of the climate summit, was singled out for its role in fostering dialogue between government and industry on climate and energy matters. “We welcome the fact that for the fourth year running, Standard Bank has occasioned this conversation, bringing together the private sector to discuss how best they can support our net-zero path,” Ramokgopa said.
However, while Ramokgopa pushed for greater cooperation between the government and private entities, he also conceded that certain aspects of the country’s energy transition strategy required revision. He acknowledged flaws in the government’s plan to develop a natural gas supply industry, suggesting the plan needed to be reworked to ensure the energy transition remained on course.
Eskom’s proposed tariff increase has raised concerns among South Africans, who are already dealing with the financial strain of load shedding and escalating living costs. If approved, the hike will place further pressure on consumers, making electricity significantly more expensive. Ramokgopa’s remarks suggest that the government is mindful of this impact and is preparing measures to mitigate the financial burden on households and businesses.
Nersa is expected to make a decision on Eskom’s tariff application by the end of the year, and the outcome will be closely watched by stakeholders across the country.
