BUDGET 2025 | Transmission pilot coming as Godongwana adjusts Eskom debt relief tranches

Finance minister Enoch Godongwana’s 2025 budget was set to announced that the department of electricity and energy will call for proposals to pilot an independent transmission project by November this year.

Godongwana tabled the 2025 budget in parliament on Wednesday afternoon. It was the first budget speech under the government of national unity (GNU).

The Budget Review, which was not tabled but was shared with journalists and economists, said the private sector will soon be brought into the fold to help develop 14,000km of transmission lines as Eskom continues the work of unbundling into three entities: generation, transmission and distribution.

“The department of electricity and energy is preparing to issue a request for proposals for a pilot independent transmission project in November 2025. This will invite the private sector to assist the National Transmission Company in expanding transmission lines.”

Godongwana's written budget speech said the final R70bn debt takeover will be replaced with two advances of R40bn in 2025/26 and R10bn in 2028/29, resulting in a total saving of R24bn.

“Our Eskom debt relief arrangements are beginning to bear fruit. Eskom is now in a much better financial position than when the debt relief was originally announced. As a result of these improvements, we have decided to simplify the final phase of the debt relief package.

“As the agreement moves towards closure, government has decided, in consultation with Eskom, to simplify the final phase of the debt relief — a change that also reflects some improvement in the utility’s financial position flowing from the interventions today.”

In a blunt account of the state of Eskom, however, the Budget Review said while the electricity giant has been pulled from the precipice of financial, operational and governance ruin, things were still far from rosy for the parastatal.

“Eskom continues to rely on government support through the debt-relief arrangement to operate. Revenue grew by 14% to R295.8bn in 2023/24 due to an 18.7% tariff increase, while sales fell by 3%.”

The Budget Review said Eskom’s losses doubled to R55bn in 2023/24 due to tariffs that did not reflect costs, poor operational performance, nonpayment by indebted municipalities for electricity and high finance costs.

“Progress on unbundling has been slow. After Eskom failed to dispose of the Eskom Finance Company (by the agreed deadline, government reduced the debt-relief allocation by R4bn.”

Over the five-year period, government will have provided Eskom with loans to the value of R230bn to assist with its crippling debt.