Eskom is well on its way to recovery, with board chairperson Mteto Nyati, predicting it won't be long before the power utility is able to operate without bailouts from government.
In an interview with TimesLIVE Premium, Nyati said he was confident the power utility's turnaround strategy would yield significant results, including recovering from its financial losses.
In July, Financial Times reported Eskom would release public figures showing a R15bn annual loss, largely due to diesel costs of R33bn, having recorded a full-year loss of R23.2bn in 2023.
Government has provided Eskom with debt relief amounting to R254bn.
The National Treasury said this will be in the form of advances of R78bn in 2023/24, R66bn in 2024/25 and R40bn in 2025/26.
Nyati has until 2025 to fulfil his mandate.
Nyati said Eskom was beginning to show signs of financial recovery.
He said while an end to load-shedding was one of the main objectives, the board and its executive are also aiming for a business turnaround and an end to corruption.
In two years, we'll be able to get to an energy availability factor of 70%. At that time, we feel we will be able to declare there's not going to be any load-shedding.
— Eskom chair Mteto Nyati
“Once we have significantly reduced our debt levels, once we are able to deliver profits for the business, and we're able to do that over time, then we'll say we would have turned around this business ... is Eskom ever going to be able to stand on its own two feet? Our view is that yes, and that is going to be actually soon.”
Nyati, who was appointed Eskom chair in October, has played a central role in improving the utility's performance.
Eskom was hamstrung by its huge debt and years of poor maintenance, implementing stage six load-shedding and pummelling an economy already in the doldrums.
Under Nyati and Eskom CEO Dan Marokane's leadership, the country is on its way to a record six months without load-shedding.
Despite this achievement, Nyati said Eskom was not yet in the clear, refusing to say whether this meant an end to load-shedding in the long term.
“We are where we are, exactly where we thought we would be at this time. About 18 months ago, when we set up this generation recovery plan, we set out a two-year plan. In two years we'll be able to get to an energy availability factor of 70%. At that time, we feel we will be able to declare there's not going to be any load-shedding.
“We are 18 months or so into that plan, and the end of the two years is going to be March 2025, so we still have actions we are taking that need to take us where we thought we would be in 2025 ... we feel everything is moving in the right direction. The end of load-shedding is near.”
Nyati added the five months without load-shedding has significantly increased sales. This, he said, also meant the power utility was using less diesel.
Eskom, accustomed to spending billions on diesel for open cycle gas turbines, was able to reduce its diesel spend by R10bn in the past financial year.
“So we had planned at the beginning of the financial year to use R30bn of diesel. We ended up using R33bn. But now you have done most of this maintenance, you are bringing these machines back, they are more reliable which means we're using less diesel. So you are saving from last year.
“So those savings, where do they go? They go to the bottom line. That a fair amount of savings, it helps with the finances of Eskom.”
Nyati said Eskom was also saving on interest charges towards its debt due to the bailouts from the National Treasury.
“So we are recording savings on the interest, on diesel and on the top line you've got the revenue increase because there's no load-shedding. A combination of those things should get us very quickly to a position where Eskom is profitable,” he said.
Nyati had originally been earmarked by President Cyril Ramaphosa to take over as Eskom CEO. He would later join the power utility as a member of the board before becoming its chair.
The former CEO of MTN South Africa and Altron said he was attracted to the role because, being a fixer in business, he loved a challenge.
“I always say I'm attracted to roles where there is a mess, that's where you'll find me and that's just me being self-aware ... And when I looked at that role [Eskom] it had all the key elements.”
“I think when you look at the roles I've occupied in the past, most of those roles revolve around turning things around, taking things that are not working and getting them to a point where you've got an organisation that is performing perfectly well,” he said.
He emphasised the relationship with the CEO had been critical to the recovery of Eskom. He said the chemistry between them meant that he would not usurp Marokane's powers, adding he respected the role of the CEO.
“Many people sitting on the board, what do they do? They overreach, they try to run the company. I have no desire to do that. Plus I have a huge amount of confidence and respect for the person [at the helm] and know he's going to be able to do what we ask him to do, or what the business requires. So that chemistry is very important, and the level of trust as well,” he said.
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