Global ratings boost post-G20; implications for load-shedding end and investor confidence.
In a landmark moment for South Africa’s beleaguered energy sector, S&P Global Ratings has upgraded Eskom’s foreign and local currency long-term credit ratings from B to B+, assigning a stable outlook. This announcement, made on November 25, 2025, comes just days after the G20 Summit in Johannesburg wrapped up, where global leaders spotlighted Africa’s energy transitions and sustainable development. For millions of South Africans tired of flickering lights and skyrocketing bills, this upgrade isn’t just financial jargon—it’s a beacon of hope signaling the end of chronic load-shedding and potentially lighter wallets.
The Upgrade: A Vote of Confidence in Eskom’s Revival
Eskom, the state-owned utility that powers over 90% of South Africa’s electricity needs, has long been synonymous with crisis. Years of mismanagement, corruption scandals, and aging infrastructure led to unprecedented blackouts, crippling the economy and daily life. But under CEO Dan Marokane’s leadership, the company’s Turnaround Plan has delivered tangible results. S&P cited “measurable impact” from stabilized generation, improved financial performance, and strengthened governance as key drivers for the upgrade.
Operationally, Eskom has turned a corner. In the current financial year, the utility delivered electricity 97.9% of the time—up from 96% last year—marking a sharp decline in unplanned outages. Unplanned capability loss has dropped by over 2,300 MW year-on-year, and diesel expenditure for emergency generation is plummeting, saving billions. Financially, Eskom posted a pre-tax profit of R23.9 billion for the year ended March 2025—its first in eight years—bolstered by a R254 billion government debt relief package. This profitability marks a significant shift, with revenue increasing by R45 billion due to higher sales volumes from reduced load-shedding and a 12.74% tariff adjustment, while finance costs dropped by R5 billion thanks to lower borrowings.
The stable outlook underscores S&P’s belief in continued government support and Eskom’s trajectory toward sustainability. National scale ratings also improved to zaAV/zaA-1, positioning Eskom as one of South Africa’s most reliable issuers. This isn’t isolated; it follows S&P’s upgrade of South Africa’s sovereign rating to BB with a positive outlook earlier in November, explicitly crediting Eskom’s performance for reducing contingent liabilities. The sovereign upgrade, the first in nearly 20 years, highlights improved fiscal discipline, with debt stabilizing at 77.9% of GDP and the budget deficit narrowing to 4.7% in 2025/26.
G20 Momentum: A Global Spotlight on South Africa’s Energy Shift
The timing couldn’t be more poignant. South Africa’s G20 presidency in 2025, themed “Solidarity, Equality and Sustainability,” placed the continent’s energy challenges front and center. Hosted in Johannesburg on November 22-23, the summit gathered leaders to discuss climate resilience, just energy transitions, and mobilizing finance for renewables. Outcomes included commitments to scale up climate finance, reform global institutions like the IMF for better Global South representation, and promote inclusive industrialization through critical minerals value chains. Despite the U.S. boycott under the Trump administration, the event was hailed as a triumph for multilateralism, with a 122-point Johannesburg Declaration emphasizing unity among 72% of the world’s population and two-thirds of global GDP.
For Eskom, the G20 provided a platform to showcase its Generation Recovery Plan and unbundling efforts, including the launch of the National Transmission Company of South Africa. Eskom executives, like Group Executive Alfred Seema and Chief Nuclear Officer Velaphi Ntuli, engaged in forums emphasizing strategic partnerships for improved generation and nuclear expansion. These discussions align with G20 pledges for energy-transition finance, potentially unlocking billions in investments for South Africa’s grid modernization and renewable integration. The summit’s focus on trade, development, and infrastructure resonated deeply, fostering new alliances that could accelerate funding for African energy projects.
The summit’s focus on Africa’s AfCFTA and infrastructure pacts resonates with Eskom’s role in regional energy security. By addressing debt sustainability and disaster risk reduction, the G20 has indirectly fortified Eskom’s path, boosting investor confidence just as the ratings upgrade hit. Leaders from Brazil, India, and the EU highlighted the need for equitable financing, with commitments to support low-carbon transitions that could benefit Eskom’s diversification from coal. This global endorsement not only validates South Africa’s leadership but also positions the country as a hub for sustainable energy innovation on the continent.
Bidding Farewell to Load-Shedding: Lights On for Good?
Load-shedding has been South Africa’s albatross, costing the economy up to R360 billion annually in lost productivity and GDP growth. At its peak, stage 6 blackouts plunged the nation into darkness for hours daily, stifling businesses and households alike. But 2025 tells a different story: over 170 days without load-shedding, with projections for none through the summer season. According to the Council for Scientific and Industrial Research (CSIR), the economy lost up to R2.8 trillion to load-shedding in 2023, a figure slashed by 83% to R481 billion in 2024, thanks to Eskom’s relentless efforts.
The Turnaround Plan’s emphasis on maintenance and private sector involvement has boosted the energy availability factor (EAF) to around 70% in recent months and reduced breakdowns significantly. Eskom’s Summer Outlook forecasts stable supply, supported by 28,545 MW of capacity against peak demands of 23,668 MW. While “load reduction” persists in high-usage areas to protect infrastructure—targeting illegal connections and meter tampering—full-scale shedding feels like a relic of the past. Year-to-date, unplanned outages averaged 8,441 MW, a 2,376 MW improvement from last year, with diesel usage down by R16.3 billion due to better coal plant reliability and less reliance on expensive Open Cycle Gas Turbines.
This reliability isn’t accidental. Reforms like the Energy Action Plan and state of disaster declaration in 2022-2023 have accelerated private renewable projects, easing Eskom’s burden. The upgrade validates these strides, with S&P noting Eskom’s shift “from a generation crisis to a phase of reliability.” For everyday South Africans, it means fewer candlelit dinners and uninterrupted Netflix binges— a true power sector turnaround. Moreover, the virtual eradication of load-shedding has increased sales volumes by 4%, directly contributing to financial recovery and paving the way for broader economic revitalization.
Investor Confidence: Fueling Growth and Innovation
A B+ rating with stable outlook is music to investors’ ears. It lowers Eskom’s borrowing costs, making it easier to fund critical upgrades like the R1 trillion grid expansion needed by 2030. Senior secured and unsecured debt ratings rose in tandem, while government-guaranteed debt hit BB+. This ripple effect extends to South Africa’s broader economy, where Eskom’s stability has already contributed to the sovereign upgrade, projecting 1.5% average GDP growth through 2028. Bond yields have responded positively, with 10-year yields dropping to 8.65%, signaling renewed market optimism.
Investor sentiment is surging. The G20’s investment pacts aim to channel funds into African renewables and infrastructure, with Eskom poised as a key beneficiary. Partnerships with entities like Anglo American and Standard Bank could accelerate solar and wind integrations, diversifying from coal-dependent generation. Moreover, reduced contingent liabilities free up fiscal space for growth-oriented policies, from job creation to export boosts. As Eskom prepares for a liberalized market, its improved audit outcomes—closing 90% of findings from prior years—and governance enhancements are attracting private capital for the Integrated Resource Plan (IRP) 2025, which balances security, affordability, and sustainability.
Challenges remain—municipal debt arrears top R100 billion, and global energy prices fluctuate—but the stable outlook signals resilience. As Minister Kgosientsho Ramokgopa tweeted, this upgrade reflects “collective efforts” toward a secure energy future. With Eskom’s debt reduced to R372 billion and profitability reinvested in infrastructure, the utility is increasingly seen as a sustainable, investable entity ready to compete in a reformed market.
Your Electricity Bills: Relief on the Horizon?
Here’s where it hits home: your monthly Eskom bill. Historically, tariffs have risen above inflation—over 300% since 2007—to fund bailouts and maintenance, exacerbating energy poverty. The National Energy Regulator of South Africa (NERSA) approved a 12.74% hike for direct customers in 2025/26—far below Eskom’s 36.15% request—while municipal bulk purchases see an 11.32% increase effective July 2025. This decision, balancing Eskom’s R384 billion allowable revenue needs with affordability, includes simplified structures to eliminate cross-subsidies, ensuring users pay for actual costs incurred.
Lower borrowing costs mean less debt servicing passed to consumers. Profitability reduces reliance on tariff hikes, while diesel savings—over R16 billion—directly lower operational expenses. Efficiency gains from the Turnaround Plan, like optimized plant performance, promise more electricity for less cost. Coupled with G20-backed renewables, which are cheaper long-term, bills could stabilize or even dip for high-usage households. The new tariffs introduce separate charges for generation capacity, preventing non-solar users from subsidizing those with rooftop systems, and promote equity through a user-pays principle.
That said, affordability hinges on addressing non-payment cultures and municipal debts, now at R94.6 billion. As Eskom combats corruption and enhances governance, transparent pricing could build trust, encouraging timely payments and easing the burden on bill-paying customers. For now, the upgrade paves the way for sustainable tariffs, potentially saving households hundreds of rands annually as load-shedding’s hidden costs—generators, spoiled food—fade away. Looking ahead to 2026/27 and 2027/28, NERSA’s approvals of 5.36% and 6.19% hikes respectively suggest a trajectory of moderation, supported by ongoing reforms and revenue outperformance from VAT and corporate taxes.
The Road Ahead: Sustaining the Spark
South Africa’s power sector is no longer in freefall; it’s ascending. The S&P upgrade, amplified by G20 solidarity, heralds an era of reliability, investment, and fiscal prudence. Load-shedding’s end isn’t just possible—it’s probable, unlocking economic potential and brighter homes. With EAF targets at 70% and winter outlooks predicting no shedding if outages stay below 13 GW, Eskom’s Generation Recovery Plan continues to deliver, backed by a skilled workforce of 42,000 employees.
Yet vigilance is key. Continued reforms, private capital influx, and global partnerships will determine if this turnaround endures. For Eskom, the message is clear: deliver on promises, and the lights—and the economy—will stay on. As Marokane affirms, the focus remains “affordable, secure electricity” for all. In a nation powered by resilience, this upgrade is more than a rating—it’s a revolution. By reinvesting profits into critical infrastructure, combating illegal connections, and aligning with the IRP 2025’s low-carbon goals, Eskom is not just recovering but reimagining South Africa’s energy future—one reliable watt at a time.