Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC INTEGRATED REPORT 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information Our value creation journey Our reporting suite and approach 3 5 Please use the tabs at the top of this report as well as 1 Performance overview 83 the buttons to navigate digitally Previous page Next page Condensed annual financial statements 84 Transforming energy to Financial review 90 create value 5 Strengthening our infrastructure 98 Previous view Contents page Interacting with the environment 110 Who we are and what we do 6 Growing our people 120 ABC Abbreviations and glossary How we deliver value 12 Sustaining communities 127 6 Meet our leadership 15 Identifying key topics 19 Connecting with stakeholders 21 PERFORMANCE INDICATORS 2 Throughout this integrated report, performance against target is indicated as follows: Supplementary information 132 Met or exceeded target Thoughts from our Abbreviations and glossary of terms 133 leadership 25 Leadership qualifications and directorships 136 Almost met target (within a 5% threshold) Technical and non-technical statistics 140 Message from the Chairman 26 Plant and customer information 145 Did not meet target Chief Executive’s review 29 Environmental implications of using electricity 149 Chief Financial Officer’s commentary 33 3 Sustainability indicators subject to reasonable assurance 150 SC  The key performance indicator is included in our Independent sustainability assurance report by Deloitte & Touche 153 annual compact with the shareholder Disclosure of information under the PFMA 155 Our strategic and risk Deviations, expansions and variations reported to National Treasury 161 ADDITIONAL CONTENT landscape 37 Corporate information 164 Additional information Reflecting on our operating context 38 Repositioning Eskom for sustainability in a transforming industry 42 Content available online Mitigating risk and maintaining resilience 46 4 Leveraging governance for transformation Report by the Board and reflecting on its performance Activities of the Board’s committees Conclusion on assurance and controls 53 54 59 60 We are a proud supporter member of To complete a short survey on our reports, please click here Remuneration report 65 Fighting crime, fraud and corruption 75 Upholding good governance 81 2 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Our reporting suite and approach OUR SUITE OF REPORTS FRAMEWORKS ASSURANCE The integrated report is prepared in accordance with  he full list of KPIs selected for reasonable assurance by IR T In conjunction with the review by management, Exco Eskom’s 2025 reporting suite covers the financial year Deloitte & Touche are disclosed from page 150. Their ended 31 March 2025 and considers significant events the Integrated Reporting Framework (January 2021) and the Audit Committee on behalf of the Board, independent assurance report is included from page 153 up to 29 September 2025, being the date the Board and aligns with: the consolidated and separate financial statements and includes their basis of conclusion on the qualified KPI of Directors approved the reports. • The South African Companies Act, 2008 have been audited by Deloitte & Touche, acting on • Regulations issued by National Treasury covering behalf of the Auditor-General of South Africa. They The suite of reports, available at www.eskom.co.za/ comprehensive disclosure under the Public Finance ANNUAL FINANCIAL STATEMENTS issued a qualified opinion regarding certain PFMA- investors/integrated-results/, comprises: Management Act, 1999 (PFMA) of irregular PURPOSE AND AUDIENCE related disclosures. Except for this qualification, • Integrated report expenditure, fruitless and wasteful expenditure and The consolidated and separate the financial statements are considered to be fairly • Annual financial statements losses due to criminal conduct annual financial statements presented in terms of IFRS Accounting Standards. • King IV Report on Corporate Governance™ for intend to provide a fair and The audit report also highlights several matters. One • Sustainability report South Africa, 20161 (King IV) comprehensive view of the of these concerns a material uncertainty regarding Each report is tailored to a specific audience, guided • Global best practice financial position, performance Eskom’s ability to continue as a going concern, by relevant frameworks and regulations, and subject and cash flows of the Eskom which is due to its dependence on Government to defined materiality thresholds and assurance levels. We are assessing the implications on future reporting support, uncertainties related to the achievement of group and company for the of the IFRS® Sustainability Disclosure Standards operational assumptions and the determination of year ended 31 March 2025. S1 and S2 which deal with general sustainability- regulated revenue by NERSA, as well as the financial related disclosures and climate-related disclosures risk associated with municipal arrear debt and energy respectively, issued by the International Sustainability losses. These matters do not affect their opinion. Standards Board (ISSB) in June 2023. The financial statements include: MATERIALITY • Reports by the Board of Directors and the Audit AFS T he independent auditor’s report is included in the Committee annual financial statements We apply the principle of double materiality in the integrated report: • Statements of financial position, profit and loss, • Financial materiality: External factors impacting changes in equity and cash flows, together with financial results detailed notes INTEGRATED REPORT • Impact materiality: Internal matters affecting the • Events after the reporting date, PFMA disclosures PURPOSE AND AUDIENCE external environment for the current year, the impact of new accounting The integrated report provides a comprehensive standards and details of reportable irregularities overview of Eskom’s value creation journey, strategy, Materiality is assessed both qualitatively and quantitatively, aligned with strategic objectives and risks. raised by the external auditors governance, risks and opportunities, performance and outlook. Supplementary information is also included. The financial statements serve a wide audience, including ASSURANCE We believe in providing a balanced, transparent and shareholders, investors, creditors, regulators, analysts, The report is reviewed by subject matter experts from complete account of the group’s performance, by employees and the public by providing decision-useful SUSTAINABILITY REPORT the business, as well as by management, Exco and the focusing on matters material to our ability to create information to users while ensuring transparency and PURPOSE AND AUDIENCE Board. Furthermore, Internal Audit provided reasonable or preserve value, or to limit the erosion of value over comparability across reporting periods and entities. The sustainability report expands on the integrated assurance on quantitative non-financial data disclosed the short, medium and long term. in the report. Deloitte & Touche, our independent report by detailing Eskom’s sustainability impacts. FRAMEWORKS It targets a wide range of stakeholders interested The report aims to provide information to our external auditors, provided reasonable assurance on a The consolidated and separate financial statements selection of key performance indicators (KPIs) disclosed in our environmental, social and governance (ESG) stakeholders, the most notable of which is the people have been prepared in accordance with IFRS® performance. of South Africa, both as our indirect shareholders – in the integrated and sustainability reports. All but one Accounting Standards issued by the International represented by the Minister of Electricity and Energy – of the 35 KPIs scoped for reasonable assurance received Accounting Standards Board (IASB) as well as the FRAMEWORKS and as our customers. It is further aimed at providers of an unqualified opinion. Deloitte & Touche also reviewed requirements of the PFMA and the Companies Act. The sustainability report is guided by the reporting financial capital – lenders, bondholders and investors – the report for any statements contradicting the annual principles of the Global Reporting Initiative (GRI) as well as our broader stakeholder base. The information financial statements or for inconsistencies with the MATERIALITY and considers our contribution to the United provides a means of accountability to stakeholders and sustainability report. The consolidated and separate financial statements Nations’ Sustainable Development Goals (SDGs). It allows them to make informed decisions. are prepared using the principle of financial includes climate-related disclosures which have been materiality. Information is considered material if its incorporated into IFRS S2 Climate-related Disclosures. omission or misstatement could influence decisions by As indicated earlier, we are assessing the implications the users of the financial statements. of IFRS S1 and S2 on future reporting. 1. Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved. 3 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Our reporting suite and approach continued Our internal ESG framework sets out the material with the Department of Electricity and Energy (DEE) ESG risks and opportunities we face and the as representative of our one direct shareholder, GOVERNANCE AND APPROVAL BY THE BOARD governance structures that provide oversight on the the South African Government, acting on behalf of The Board approved the 2025 integrated report on 29 September 2025, after having considered the plans in places to address these. We measure our the people of South Africa. This is indicated where completeness, transparency and reliability of the report and its alignment with the Integrated Reporting performance through targeted metrics. applicable with SC . Framework. The approval was based on the recommendation for approval by the Audit Committee and took account of input from the Social, Ethics and Sustainability Committee and the Human Capital and MATERIALITY REPORTING BOUNDARY AND Remuneration Committee. The sustainability repor t focuses on the principle COMPARABILITY of impact materiality, highlighting the group’s most The report includes the performance of Eskom significant effects on the economy, environment Holdings SOC Ltd and its major subsidiaries, with the and people. risks, opportunities and outcomes related to relevant stakeholder interactions. Financial data is presented in ASSURANCE South African Rand, our functional and presentation Mteto Nyati Dan Marokane Calib Cassim The report is reviewed by subject matter experts currency. Information is comparable to prior years Chairman of the Board Group Chief Executive Group Chief Financial Officer from the business, as well as by management, Exco unless otherwise noted. and the Board. Furthermore, Internal Audit provided reasonable assurance on quantitative disclosures. Although the integrated report contains a set of Selected KPIs subject to reasonable assurance by condensed financial statements, it should be read the external auditors have also been disclosed in the in conjunction with the comprehensive financial Fathima Gany Lwazi Goqwana Clive le Roux sustainability report. Deloitte & Touche also reviewed statements for a complete overview of financial Chair: Audit Committee Independent non-executive Chair: Business Operations the report for any statements contradicting the annual performance. Performance Committee financial statements or for inconsistencies with the integrated report. PREPARATION PROCESS The integrated report is prepared by a team from OUR APPROACH TO INTEGRATED the Group Finance Division under supervision of the REPORTING Group Chief Financial Officer, Calib Cassim CA(SA). We adopt an integrated thinking approach, by Ayanda Mafuleka Leslie Mkhabela Dr Tsakani Mthombeni evaluating the business holistically and balancing trade- The report draws on inputs from across the business Independent non-executive Lead independent director Chair: Risk Committee offs across financial and non-financial dimensions. and the content is influenced by the identified material matters. It is informed by Eskom’s strategic Corporate REPORTING PERIOD Plan, as well as quarterly reports to the shareholder This integrated repor t reviews our financial, submitted in compliance with National Treasury operational, environmental, social and governance regulations and the conditions of the Eskom Debt Bheki Ntshalintshali Tryphosa Ramano Dr Busisiwe Vilakazi performance for the financial year from Relief Act, 2023. KPIs reported herein are based on Chair: Social, Ethics and Chair: Investment and Finance Independent non-executive 1 April 2024 to 31 March 2025 and considers internal measurement specifications. Financial figures Sustainability Committee Committee the outlook for the future where appropriate. are sourced from the audited group annual financial Performance data in this repor t relates to the 2025 statements, which are prepared in accordance with financial year (FY2025) unless otherwise stated. IFRS Accounting Standards. Significant events after year end to the date of approval by the Board have been included. IR The definitions of KPIs assured by Deloitte & Touche are Dr Claudelle von Eck included from page 150 Chair: Human Capital and Remuneration Committee In this report, short term means within one year after year end, medium term within one to five years, and long term more than five years. When reporting The report is reviewed by subject matter experts on KPIs in this report, we have included the short- from the business, as well as by management, Exco and medium-term targets. Where applicable, we and the Board, in conjunction with the assurance disclosed the targets agreed in the annual compact provided by Internal Audit and Deloitte & Touche. 4 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Transforming energy to create value Who we are and what we do 6 How we deliver value 12 Meet our leadership 15 Identifying key topics 19 Connecting with stakeholders 21 5 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Who we are and what we do OUR MANDATE, VISION AND PURPOSE Eskom has a dual commercial and social mandate to drive both growth COMMERCIAL MANDATE SOCIAL MANDATE and socio-economic objectives, as set out in the figure below. This ensures Assist in lowering the cost of doing business MANDATE Providing electricity in an efficient and that the organisation remains reliable and sustainable, while contributing in SA, enabling economic growth sustainable manner to the growth of the South African economy and transitioning responsibly to a lower-carbon future. The mandate is set out in our memorandum of VISION PURPOSE incorporation (MOI) which is prepared by the Board and accepted by the Sustainable power for a better future Powering growth sustainably shareholder. Eskom’s MOI is available at SHAREHOLDER PRIORITIES www.eskom.co.za/about-eskom/company-information/ Qualitatively transform Achieving universal access, Attain sovereign and Drive industrialisation energy demographics – Assert SA, continental and Our vision and purpose support our mandate. Four strategic objectives availability, affordability regional energy security and lead innovation elevate role of women global energy leadership have been developed to achieve the mandate, vision and mission; these and quality and youth are aligned to the five strategic priorities defined by the shareholder. WHO WE ARE STRATEGIC OBJECTIVES Eskom is South Africa’s national electricity utility, operating across the country and across the border with several of our neighbouring countries. Our mandate enables us to positively influence the economy and improve Pursue financial and Facilitate a competitive Modernise our Strive for net zero the daily lives of most citizens. We are a key contributor to national operational sustainability future energy industry power system emissions by 2050 development initiatives, such as direct and indirect job creation, workforce transformation, skills development programmes, broad-based black Improve controls and economic empowerment (B-BBEE) and other initiatives. Eskom also plays Entrench a high-performance, Use data analytics to create governance processes to Obtain unbundled tariffs Drive socio-economic a key role in rural electrification, having electrified over six million homes, ethical culture, innovation value and enhance address fraud, corruption approval from NERSA transformation and aims for universal access to electricity, which improves living standards and agility decision-making and criminality and unlocks economic opportunities. Our activities also support several United Nations Sustainable Development Goals (SDGs). OUR VALUES SR Our sustainability report, which is available online, provides more information on how we affect the SDGs Zero Harm Integrity Innovation Sinobuntu Customer satisfaction Excellence KEY STAKEHOLDERS SIX CAPITALS Business and suppliers Employees Financial capital Manufactured capital General public and customers Investors Natural capital Human capital Media Regulators Parliamentary Committees Government Social and relationship capital Intellectual capital 6 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Who we are and what we do continued We are keenly aware of our responsibility to maintain this positive impact. However, when we are unable The unbundling aims to optimise Eskom’s operations to fulfil this mandate, the impact on the economy and to solidify its role in ensuring security of supply, and consumers of electricity is significant. Eskom to enable the reform of the electricity supply industry reinvented through independent system and market operators to Furthermore, our reliance on government facilitate fair access. financial support also affects the national budget and, by extension, taxpayers. It also influences New holding IR Refer to “Reflecting on our operating context the sovereign’s credit rating and borrowing company and GxCo – Adapting our business model for sustainability costs, thereby reducing funds available for other established through unbundling” from page 40 for more government programmes. To improve financial information sustainability and reduce our dependence on government support, we require an adequate tariff NEDCSA separated To enable the successful unbundling of the group, path that balances affordability with Eskom’s financial the Board has considered Eskom’s revised subsidiary sustainability as well as doing our part to achieve governance framework and active performance cost savings and efficiencies, together with a long- management parenting strategy to govern the term solution to the escalating municipal arrear debt relationship between Eskom Holdings and its existing challenge. On its own, debt relief support is not NTCSA and future subsidiaries. sufficient to guarantee sustainability over the longer separated term, as it will not resolve the structural challenges which has led to poor levels of profitability and liquidity in the past. In order to do that, cash from operations have to be sufficient to meet debt service Functionally obligations as well as the required investment to Vertically separated sustain and expand infrastructure. integrated IR Our business model outlines how we transform various inputs into electricity for customers and considers our impact across the six capitals. This is detailed from page 12 TRANSFORMING THE ORGANISATION AND The South African electricity market is being In fulfilment of our mandate, we engage with a wide THE ELECTRICITY SUPPLY INDUSTRY transformed fundamentally, and Eskom must evolve range of stakeholders, including the Department of Until recently, Eskom was one of the few remaining and be repositioned to remain a leader in the future Electricity and Energy which acts as Government’s vertically integrated utilities globally. In line with market. Unbundling will reshape Eskom into separate shareholder representative through the Minister, Government’s 2019 Roadmap for Eskom in a agile, specialised businesses, ready to thrive in the lenders, investors, other government entities Reformed Electricity Supply Industry (Government’s future energy landscape. This will create a fairer, and regulators, employees and organised labour, Roadmap), we are in the process of unbundling cleaner and smarter electricity system, benefitting customers, suppliers and civil society, with the general into three independent subsidiaries to house the both customers and employees. public indirectly being our ultimate shareholders. generation, transmission and distribution businesses. The separation also aims to improve transparency, IR Refer to “External governance and oversight” on accountability, financial viability and management focus page 10 in this section for an explanation of all by treating each business as a standalone entity. the national departments with oversight over our operations, in addition to the shareholder 7 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Who we are and what we do continued OVERVIEW OF THE GROUP Each subsidiary has its own board of directors, Energy breakdown by supplier Energy breakdown by destination Eskom Holdings SOC Ltd is the parent company with accountability to the Eskom Board as their 3% 12% of the group, headquartered in Johannesburg with shareholder representative. The Board has requested 9% administrative or technical offices in most major that the Minister of DEE appoints independent 7% centres. The group includes the holding company, its non-executive directors to the boards of EE, ERI subsidiaries and joint ventures. Most of the electricity and Esdef. These subsidiaries have Eskom employees business is housed in the holding company, which also serving as directors, and having a mix of employees holds investments in subsidiaries. Some subsidiaries and independent external directors will benefit the 216 573GWh 215 472GWh provide strategic services to the group and its subsidiaries through technical, business management employees. The holding company remains the primary and corporate governance experience and expertise contributor to group performance. provided by the subsidiary boards. 88% 81% AFS Segment disclosure for the generation, transmission AFS Full details of Eskom’s equity-accounted investees Local sales International sales and distribution businesses, together with other and subsidiaries at 31 March 2025 are set out in Eskom IPPs Imports Technical and other losses segments, is provided in note 7 of the consolidated notes 11 and 12 of the consolidated annual financial annual financial statements statements The difference between supply and demand is due to own use and timing differences. Eskom’s key subsidiaries include: WHAT WE DO Overall nominal capacity by Eskom and IPPs, by source Total energy supplied by Eskom and IPPs, by source • National Transmission Company South Africa SOC We create value by generating, transmitting, 3.4% 0.6% (excluding wheeling and net of pumping) Ltd (NTCSA): started trading from 1 July 2024 distributing, as well as buying and selling electricity. 5.1% and currently functions as the country’s interim We serve primarily local and a few international 6.2% 3.0% 1.3% Transmission System Operator while the final customers using energy we generate, together with 3.9% 0.7% structure of the envisaged independent electricity energy purchased from IPPs and power imported 6.3% 3.2% market is being determined from neighbouring countries. Mozambique remains 5.1% • Eskom Enterprises SOC Ltd (EE): an investment our most significant trading partner for both imports 6.3% 54 361MW holding company. Its main subsidiary, Eskom Rotek and exports. Industries SOC Ltd (ERI), provides technical support to the electricity business, including plant 216 573GWh IR Customer numbers, sales volumes and revenue by maintenance segment are shown on page 148 72.1% • Escap SOC Ltd: a wholly owned insurance company that manages and insures business risks across the Coal Wind Diesel Hydro 82.8% group Solar Nuclear Other • Eskom Finance Company SOC Ltd (EFC): provides Coal Wind Hydro (net) housing and other loans to employees. In accordance with the disposal mandated by the Nuclear Solar Diesel Other shareholder, the sale of the loan book to African Bank is expected to be concluded by the end of FY2026, pending regulatory approvals Our System Operator (situated in NTCSA) balances supply and demand in real time to maintain grid stability, keeping the system frequency at 50Hz. We are part of the • Eskom Development Foundation NPC (Esdef ): Southern African Power Pool (SAPP), which supports regional grid stability – this relies on robust transmission networks across member countries. a non-profit company that implements Eskom’s corporate social investment (CSI) initiatives to Eskom owns and operates most of South Africa’s base-load and peaking generation capacity. We have 30 power stations with a nominal capacity of 46 866MW, which use improve community wellbeing coal, fuel oil, nuclear fuel, water, wind and diesel to generate electricity. The group manages a transmission and distribution network of over 411 000km of power lines, the largest in Africa. Under NTCSA’s Transmission Development Plan, we aim to connect 37GW of new generation capacity, mostly from IPPs. The Western Cape, Eastern Cape, Northern Cape and Mpumalanga are targeted for the majority of the investment. IR Details on our power stations, power lines and substations are available from page 145 8 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Who we are and what we do continued IPPs – that sell to the group through NTCSA – have installed capacity of 7 495MW, mainly in the form of wind and GENERATE TRANSMIT solar photovoltaic (PV) energy. The highest hourly contribution from these sources during the period amounted to 2 118MW from solar and 2 960MW from wind. The highest total hourly contribution from renewable sources was Power stations 30 Transmission lines 33 367km almost 20%, achieved during January 2025. Nominal capacity 46 866MW Transformer capacity 161 223MVA However, renewable energy production is unpredictable and not dispatchable (the System Operator cannot control when or how much is generated), and consequently, it can sometimes strain our own coal-fired stations. When there is an oversupply of renewable energy, we must reduce the output from these stations, although this is possible Coal-fired stations 39 177MW DISTRIBUTE only to a point, if the units’ boilers are to remain stable. Coal-fired units typically idle at around 60% capacity to Nuclear power 1 854MW maintain this stability. If our base-load output cannot be reduced further to match demand and safeguard the system Overhead lines 369 342km frequency, the System Operator may be forced to curtail renewable generation, although this comes at a financial Pumped storage 2 724MW Underground cables 8 472km cost. During FY2025, we had to curtail 155GWh of renewable generation, either by limiting the contribution of solar energy and wind to the grid during the day or wind energy during the night minimum. Hydro 602MW Transformer capacity 147 387MVA The supply and demand of electricity is shown below. OCGTs 2 409MW Source, GWh 2025 2024 2023 Renewables – Wind 100MW Coal-fired stations 179 426 166 606 171 131 Nuclear power 8 409 8 172 9 803 Pumped storage stations 4 649 4 386 4 081 Open-cycle gas turbines (OCGTs) 2 176 3 634 3 018 Hydro stations 710 1 448 3 060 Wind 329 214 46 866MW Eskom generation 332 195 702 184 576 191 307 Pumping by pumped storage stations (6 064) (5 710) (5 504) Net sent out by Eskom 189 638 178 866 185 803 Independent power producers (IPPs) 19 365 20 183 17 957 Imports 7 570 9 150 8 654 Wheeling1 2 028 2 449 2 904 Energy available for distribution 218 601 210 648 215 318 Technical and other losses2 (25 339) (23 502) (23 879) Internal use (349) (329) (345) Wheeling1 (2 028) (2 449) (2 904) Unaccounted3 (1 162) (1 057) 211 Local and international sales 189 723 183 311 188 401 Additional information Estimated loadshedding and load curtailment4 354 13 215 13 476 Percentage of demand not met4 0.16% 5.92% 5.91% 1. Wheeling refers to the movement of electricity between international customers through Eskom’s network, without the power being available to customers on the South African grid. 2. Technical losses occur during the transmission and distribution of energy. Non-technical losses primarily relate to electricity theft through illegal connections, meter tampering and the use of illegal electricity tokens on prepaid meters. Meter reading and billing errors are also included. 3. The unaccounted value is a balancing figure due to different cut-off dates for recording sales and production volumes. 4. This is an estimate by the System Operator based on forecast versus actual demand at a given time. It does not account for load shifting in response to loadshedding. 9 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Who we are and what we do continued GOVERNANCE AND REGULATION OVERVIEW ESKOM HOLDINGS SOC LTD Board of Directors Exco and Committees REGULATORS Audit Capital NERSA Business Operations Performance Information and Technology SUBSIDIARIES National Nuclear Regulator Governance and Strategy Nuclear Management National Transmission Company South Africa SOC Ltd Human Capital and Remuneration Operating Eskom Enterprises SOC Ltd Investment and Finance Regulation, Policy and Economics Divisional Eskom Rotek Industries SOC Ltd Risk Risk and Sustainability boards Social, Ethics and Sustainability Tender Escap SOC Ltd SHAREHOLDER AND POLICY Turnaround Eskom Finance Company SOC Ltd MINISTRY Eskom Development Foundation NPC Department of Electricity and Energy Line divisions National Electricity Distribution Company Generation Distribution of South Africa SOC Ltd (not trading) OVERSIGHT MINISTRIES Strategic functions FUTURE SUBSIDIARIES Strategy & Planning Risk and Sustainability RT&D Internal Audit Generation Company National Treasury Group Investigation & Security Company Secretariat Eskom Green (renewables company) Department of Forestry, Fisheries and the Environment Department of Water and Sanitation Support functions Finance Human Resources Procurement Legal & Compliance Group Information Technology Government & Regulatory Affairs EXTERNAL GOVERNANCE AND OVERSIGHT Under the PFMA, we submit a strategic Corporate Plan We are subject to oversight by various other The electricity supply industry is regulated by the Eskom Holdings is wholly owned by the South annually to our shareholder and National Treasury. The government departments. National Treasury, National Energy Regulator of South Africa (NERSA) African Government. Following the formation of latest plan, approved in March 2025, covers the period the Department of Forestry, Fisheries and the under the National Energy Regulator Act, 2004 and the Government of National Unity in June 2024, to 2030. We also agree annually on a shareholder Environment (DFFE) and the Department of the Electricity Regulation Act, 2006. NERSA issues oversight of our operations was transferred to the compact, which sets targets for KPIs which are aligned Water and Sanitation (DWS) oversee compliance various licences required by the electricity supply Department of Electricity and Energy (DEE), led by with the shareholder’s Strategic Intent Statement. with financial, environmental and water-related industry and sets revenue allowances in line with the Dr Kgosientsho Ramokgopa, once the Department of Progress is reported quarterly to the shareholder and regulations. We regularly present updates to various Electricity Pricing Policy. Koeberg, our only nuclear Public Enterprises (DPE) had been dissolved following National Treasury. These documents are all approved parliamentary committees. facility, is regulated by the National Nuclear Regulator a process to rationalise oversight of large state-owned by the Board before submission. (NNR), which ensures compliance with nuclear safety entities which had commenced some time earlier. standards to protect people and the environment. IR Performance against the 2025 shareholder compact is detailed in the directors’ report in the financial statements. In this report, KPIs from the compact shown in tables are marked SC and included in the statistical section from page 140 10 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Who we are and what we do continued The group operates under a wide range of laws (SMF) aligned to the PFMA. These tools specify when and regulations, including those governing tariffs, matters must be escalated for approval to the Board environmental responsibility, procurement and or shareholder. The updated DOA, which reflects labour practices. Our generation licences also changes due to the legal separation process, was set limits on emissions and water use to minimise implemented from 1 June 2024. environmental impact. Our wholly owned subsidiaries are governed by a As a state-owned entity, Eskom is obligated to subsidiary governance framework which has been maintain and conserve heritage resources under its revised due to the legal separation process. The control in line with the National Heritage Resources framework aims to entrench sound and consistent Act, 1999. governance practices across the group and facilitate reporting by the holding company on downstream For more information on Eskom’s heritage governance activities. Various parenting approaches journey over the past ten decades, refer to were evaluated, with active performance management https://www.eskom.co.za/heritage/ emerging as the most suitable to meet the existing needs of the group: it balances strategic direction setting and performance management by the holding INTERNAL GOVERNANCE STRUCTURES company, with subsidiaries being operationally Eskom is committed to strengthening corporate independent. Under this approach, Eskom Holdings governance across the group to support effective will guide and govern subsidiaries to align to the oversight and decision-making by the Board and overall Eskom strategy, also providing funding for management, including at subsidiary level. We aim subsidiaries to execute their mandates. Performance to apply the principles and practices of King IV; we compacts will be used to set performance conduct an annual assessment of our application. expectations, and subsidiaries will have to report regularly against those compacts. The latest King IV application register is available Subsidiary boards comprise employees of Eskom, at www.eskom.co.za/about-eskom/leadership/ except for NTCSA and Escap, whose boards consist of a majority of independent directors. As indicated The Board, supported by its committees, is the earlier, the Board has requested that the Minister of focal point of governance and is accountable to DEE appoints independent non-executive directors to the shareholder for the group’s performance. It the boards of EE, ERI and Escap to better capacitate provides strategic direction and ensures long-term the subsidiary boards in terms of experience and sustainability. The Executive Management Committee expertise. (Exco) is responsible for managing day-to-day Divisional boards for Generation and Distribution operations and for implementing the Board-approved serve as transitional structures during the legal strategy. separation process. They promote accountability within each division and report to Exco to ensure IR Detail of the composition of Board and Exco is alignment with Eskom’s overall strategy. These boards provided from page 15 are operational in nature and do not constitute formal boards of directors under the Companies Our governance framework is built on clear roles and Act, 2008. Once separation is complete, the boards responsibilities between the shareholder, the Board of the new subsidiaries will consist of a majority of and management. The roles are defined in Eskom’s independent non-executive directors and will remain memorandum of incorporation (MOI) and further accountable to the Eskom Board as their shareholder supported by our delegation of authority policy representative in line with good governance practices. (DOA) and significance and materiality framework 11 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC How we deliver value The availability and quality of our six capital inputs empowers us to deliver on our strategy and turnaround objectives. This enables us to deliver essential electricity services and outcomes that drive long-term value for our stakeholders and enable the growth and sustainability of South Africa. OUR SIX CAPITALS OUR INPUTS TO THE CAPITALS We aim to align our value creation FINANCIAL CAPITAL R8.7 billion Funding raised (2024: R23.6 billion) with a selection of UN SDGs Financial capital includes retained earnings, equity from National R64 billion Government support (2024: R76 billion) Treasury and Government-guaranteed debt funding. Lenders earn interest, but shareholders do not receive dividends due to financial constraints at this time.​ MANUFACTURED CAPITAL 46 866MW Nominal power station capacity (2024: 46 788MW) Manufactured capital consists of power stations as well as 7 495MW IPP capacity (2024: 7 495MW) transmission and distribution networks, supplemented by IPPs and 411 181km Power lines and cables (2024: 409 128km) imports. It is enhanced by commissioning new units, extending power lines, and maintaining existing plant.​ NATURAL CAPITAL 106.2Mt Coal burnt (2024: 99.5Mt) Natural capital includes non-renewable energy sources like coal, 268 638Mℓ Net raw water used (2024: 260 680Mℓ) water, and nuclear fuel, consumed to generate electricity. Waste is produced, impacting the environment. We aim to transition Non-renewable energy sources Renewable energy sources to renewable energy and mitigate impacts on bird life from 179 426GWh Coal (2024: 166 607GWh) 12 999GWh Hydro (2024: 15 026GWh) transmission networks. 8 409GWh Nuclear power (2024: 8 172GWh) 10 983GWh Wind (2024: 11 573GWh) 2 838GWh Eskom and IPP OCGTs (2024: 5 143GWh) 6 492GWh Solar (2024: 6 401GWh) SR Read more about our impact on 425GWh Other (2024: 518GWh) 1 065GWh Other (2024: 469GWh) the SDGs in the sustainability report HUMAN CAPITAL 40 625 Employees (at 31 March 2024) Human capital involves employees’ competencies, focusing on R1.5 billion Training spend (2024: R1.4 billion) racial, gender and disability equity. Despite financial constraints, we 1 405 Headcount increase (2024: 1 024 increase) enhance skills through training, balancing headcount changes with preserving our knowledge base. Loss of competent staff impacts 2 609 Technical and non-technical learners (2024: 2 086) this base. 612 Youth Employment Services learners appointed (2024: 519) SOCIAL AND RELATIONSHIP CAPITAL R146.2 million CSI committed spend (2024: R93.1 million) Social and relationship capital involves interactions with R205.4 billion B-BBEE attributable procurement spend (2024: R178.8 billion) stakeholders, supporting economic growth, job creation, B-BBEE R2.4 billion Electrification spend funded by Government (2024: R2.9 billion) and socio-economic development. We acknowledge the negative health impacts of our operations and are working on projects to reduce emissions. INTELLECTUAL CAPITAL R145.8 million Research, testing and development spend (2024: R123.5 million) Intellectual capital encompasses technology, organisational Information technology, telecommunications and operational technology knowledge, systems, policies and innovation. Our System Operator Organisational knowledge, intellectual property, systems, policies and procedures manages the supply-demand balance, maintaining the frequency at 50Hz, and is crucial for future technological advancements and operational improvements. 12 ESKOM HOLDINGS SOC LTD Integrated report 2025 Who we are and Transforming howto energy wecreate createvalue value Leadership Thoughts from ourreports leadership Our Our strategic strategic andand risk risk landscape landscape Governance Leveraging governance forethics and transformation Performance review Performance overview Supplementary Supplementaryinformation information ABC Delivering value through How we deliver our business model continued value continued Eskom generates, transmits, and distributes electricity to industrial, mining, commercial, agricultural and residential customers, as well as redistributors, including municipalities and metros. GENERATION TRANSMISSION NTCSA DISTRIBUTION OUTPUTS PRODUCTS WASTE AND BY-PRODUCTS Power stations produce electricity from coal, nuclear and renewable High-voltage electricity is transmitted via Medium- and low-voltage resources, using primary energy inputs such as coal, water, the national grid using transformers and electricity is distributed to 183 189 311GWh 723GWh 29.27Mt 30.24Mt limestone, fuel oil, diesel and nuclear fuel transmission lines customers and redistributors Electricity sales to Ash produced using substations and distributors and (2024:30.20Mt) (2023: 29.27Mt) Coal and gas: We generate electricity from coal and gas, These transformers lower the voltage of the reticulation lines and cables industrial, commercial, optimising asset performance and utilising Eskom and IPP stations for electricity international, residential 145.30kt 122.94kt peaking capacity and other customers Particulate emissions SYSTEM OPERATOR (2023: (2024:129.32kt) 145.30kt) (2023: (2024:188 183401GWh) 311GWh) Nuclear: We operate Koeberg, Africa’s only nuclear power station We maintain the frequency of the power system at 50Hz to balance electricity supply 190.4Mt 204.6Mt Renewables: Renewable energy (hydro, wind and solar) is CO2 emitted supplied from Eskom, IPPs and imports and demand in real time 2 (2023: (2024: 187.5Mt) 190.4Mt) 1 Power stations generate electricity. We also purchase 4 Electricity is distributed to customers and externally generated energy from IPPs and import partners redistributed by municipalities and metros Distribution substation Hydro Industrial Nuclear High-voltage transmission line 3 Transformers lower the voltage Wind High-voltage transformer Poles 2 High-voltage electricity is transmitted via the Commercial Solar national transmission grid Coal-fired and OCGTs Residential 113 ESKOM ESKOMHOLDINGS HOLDINGSSOC LTD Integrated SOCLTD Integratedreport report2024 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC How we deliver value continued OUR CAPITAL OUTCOMES Value eroded Value preserved OUR MATERIAL MATTERS Value created FINANCIAL CAPITAL R79.8 billion Debt and interest repaid (2024: R89.8 billion) R99 billion EBITDA (2024: R43.4 billion) M1 Strengthening leadership R340.9 billion Revenue (2024: R295.8 billion) R94.6 billion Municipal arrear debt (2024: R74.4 billion) M2 Securing financial sustainability R17.7 billion Eskom and IPP OCGT spend (2024: R33.9 billion) M3 Achieving operational excellence MANUFACTURED CAPITAL 60.60% Energy availability factor (2024: 54.56%) M4 Enhancing environmental stewardship 292.6km Transmission lines installed (2024: 74.4km) 2 620MVA Transmission transformer capacity installed (2024: 23MVA) 799MW from the commercial operation of Kusile Unit 5 M5 Building a skilled workforce R41.1 billion Capital expenditure (2024: R37 billion) Synchronisation of Kusile Unit 6 M6 Furthering national developmental goals NATURAL CAPITAL M7 Executing the legal separation 65 Environmental legal contraventions (2024: 68) 0.64kg/MWhSO Relative particulate emissions (2024: 0.79kg/MWhSO) M8 Creating the Eskom of the future 1.40ℓ/kWhSO Specific water consumption (2024: 1.43ℓ/kWhSO) M9 Advancing climate action HUMAN CAPITAL M10 Upholding governance, compliance and ethics 42 030 Employees at year end R45.4 billion Gross employee benefit expense (2024: R37.1 billion) M11 Fighting crime, fraud and corruption Revised Exco structure and fully capacitated executive team 930 Employees enrolled for further studies (2024: 930) 0.23 Lost-time injury rate (2024: 0.29) 3 106 Appointments through internal hires and promotions (2024: 3 062) 3 Employee and contractor fatalities (2024: 5) IR Refer to the material matters on page 19 SOCIAL AND RELATIONSHIP CAPITAL 86.8% Key customer delight (2024: 88.1%) 83 031 Electrification connections (2024: 114 800) KEY STAKEHOLDERS WE IMPACT 1 203 566 CSI beneficiaries (2024: 272 217) 13 days Loadshedding (2024: 329) Business and suppliers Employees R  43.5 billion Total taxes, duties and levies paid and withheld General public Investors (2024: R30.8 billion) and customers Media Regulators INTELLECTUAL CAPITAL Training facility accredited at Komati to develop local skills and capabilities in the renewables space Government and parliamentary committees Microgrid assembly line constructed at Komati for deployment of containerised smart microgrid solutions to support electrification IR For more information on stakeholders refer to page 21 14 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Board of Directors at 31 March 2025  efer to page 136 for full details of directors’ qualifications and directorships IR R G A R R A H G S H R S MTETO NYATI (60) LESLIE MKHABELA (52) DAN MAROKANE (53) CALIB CASSIM (53) FATHIMA GANY (49) Chairman Lead independent director (LID) Group Chief Executive Group Chief Financial Officer Independent non-executive director Appointed to the Board in October 2022; Appointed to the Board in October 2022; Appointed to the Board in March 2024 Appointed to the Board in July 2017 Appointed to the Board in October 2022 appointed as Chairman in October 2023 appointed as LID in January 2025 Engineer with previous Eskom executive Chartered Accountant (SA), serving Finance professional, registered as a Engineer with experience in manufacturing Legal professional with experience in experience from 2010 to 2015, including in as Group Chief Financial Officer since Chartered Accountant (SA) and ICT; served as CEO of MTN SA and restructuring of state-owned assets, Group Capital, Primary Energy as well as July 2017; acted as Group Chief Executive Altron Group commercial law and dispute resolution Technology and Commercial from February 2023 to February 2024 B B A B G H G B G H I I H I R R R S S S LWAZI GOQWANA (49) CLIVE LE ROUX (73) AYANDA MAFULEKA (45) DR TSAKANI MTHOMBENI (45) BHEKI NTSHALINTSHALI (71) Independent non-executive director Independent non-executive director Independent non-executive director Independent non-executive director Independent non-executive director Appointed to the Board in October 2022 Appointed to the Board in October 2022 Appointed to the Board in October 2022 Appointed to the Board in October 2022 Appointed to the Board in October 2022 Engineer with experience in manufacturing, Engineer with experience as power station Finance professional, registered as a Engineer with experience in sustainable Former trade unionist; served as general construction, financial services, logistics, general manager at Matimba and Koeberg; Char tered Accountant (SA) development, energy management and secretary of the Congress of South African energy and government services served as Eskom Chief Nuclear Officer climate change strategy Trade Unions (COSATU) Demographics Age diversity Board meeting attendance Membership of Board committees 23% Denotes chair of a committee (60+) F ormer Audit and Risk Committee (now the Audit Committee) 78 39% A 7 5 1 (40–49) 98% B G Business Operations Performance Committee Governance and Strategy Committee ACI ACI White Board and Board committee H Human Capital and Remuneration Committee males females male meetings held during the year I Investment and Finance Committee (2024: 94) R R isk Committee (newly established in February 2025, following ACI refers to African, Coloured and Indian population groups. 38% the separation of the Audit and Risk Committee) (50–59) S Social, Ethics and Sustainability Committee Ages are shown at 31 March 2025. Board members participate in workshops, portfolio and standing committee meetings and site visits, as well as other engagements with various stakeholders. Attendance of these is not formally recorded. 15 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Board of Directors at 31 March 2025 continued SKILLS AND EXPERIENCE CHANGES TO THE BOARD COMPOSITION B A In terms of Eskom’s MOI, the Board may consist of a maximum Climate change G B 4 of 15 directors. The majority of the Board must be independent and environment I R non-executive directors, and there must be at least two Economics executive directors. During the year, the Board comprised S 3 and regulation 13 directors, including 11 independent non-executive directors Engineering, science and two executive directors. There were no changes to the 7 and technology Board’s composition during the year. Financial reporting, 6 The Board revised Eskom’s MOI to authorise the shareholder TRYPHOSA RAMANO (53) DR BUSISIWE VILAKAZI (41) audit and controls to appoint a LID to strengthen governance and oversight. Independent non-executive director Independent non-executive director Funding and Leslie Mkhabela, an existing independent non-executive 7 capital allocation Appointed to the Board in October 2022 Appointed to the Board in October 2022 director, was appointed as LID from 31 January 2025. Finance professional, registered as a Engineer with experience in ICT research Governance Chartered Accountant (SA) and innovation, data science and analytics, and ethics 10 strategy and digital transformation IR T he Board’s committees and the separation of the Audit and Information and Risk Committee into two distinct committees are discussed on operational technology 5 page 54 Infrastructure and project management 3 Membership of Board committees Membership of the Governance and Strategy Committee A Legal and (GSC) comprises the chairs of each of the Board committees. compliance 4 G Denotes chair of a committee Dr Tsakani Mthombeni, chair of the Risk Committee H A F ormer Audit and Risk Committee (now the Operations and established in February 2025, has therefore been appointed Audit Committee) maintenance 5 as a member of GSC. S B Business Operations Performance Committee People management, 8 Based on the latest board evaluation, the Board contains an G Governance and Strategy Committee health and safety appropriate balance of knowledge, skills, experience, diversity H Human Capital and Remuneration Committee Stakeholder relations and and independence for it to discharge its roles and responsibilities Investment and Finance Committee change management 6 I objectively and effectively, in line with King IV. R R  isk Committee (newly established at year DR CLAUDELLE VON ECK (54) Strategy and end, following the separation of the Audit and 9 Given the existing vacancies, the Board has recommended a Independent non-executive director risk management Risk Committee) list of candidates to the shareholder to ensure the Board would Appointed to the Board in October 2022 S Social, Ethics and Sustainability Committee be fully constituted with 15 directors and an appropriate mix Organisational development and change management professional; former CEO of the of skills beyond the end of its term on 30 September 2025. Institute of Internal Auditors South Africa The shareholder has extended the Board's term to 30 November 2025. BOARD INDEPENDENCE In terms of King IV and governance best practice, the Board should comprise a majority of non-executive directors, the majority of which should be independent. IR Refer to “Report by the Board and reflecting on its performance” from page 54 for the Board’s purpose, activities and decisions Our Board is comprised of for the year, reflection on its performance as well as future focus 11 independent non-executive directors areas Ages are shown at 31 March 2025. 2 executive directors 16 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Executive Management Committee at 31 March 2025  efer to page 138 for full details of Exco IR R members’ qualifications and directorships DAN MAROKANE (53) CALIB CASSIM (53) MONDE BALA (51) ROMAN CROOKES (52) Group Chief Executive Group Chief Financial Officer Group Executive: Distribution Group Executive: Group Capital Appointed to Exco in March 2024 Appointed to Exco in July 2017 Appointed to Exco in June 2023 Appointed to Exco in November 2024 6 years in Eskom (including 2010 to 2015) 23 years in Eskom 28 years in Eskom 16 years in Eskom (including 1999 to 2016) B Sc Chemical Engineering (University of Cape B Accounting Sciences (Unisa), Chartered B Sc Electrical Engineering (University B Sc Mechanical Engineering (University of Town), M Sc Petroleum Engineering (University Accountant (SA), Master of Business of Cape Town), Master of Engineering Witwatersrand), M Sc Mechanical Engineering of London), MBA (University of Cape Town) Leadership (Unisa) (University of Witwatersrand) (University of Witwatersrand) LEONARD DE VILLIERS (68) NONTOKOZO HADEBE (47) DR CANDICE HARTLEY (44) PORTIA MNGOMEZULU (49) Chief Technology and Information Officer Group Executive: Strategy and Sustainability Chief People Officer Group Executive: Corporate Services Appointed to Exco in November 2024 Appointed to Exco in November 2024 Appointed to Exco in March 2025 Appointed to Exco in November 2024 <1 year in Eskom <1 year in Eskom <1 year in Eskom <1 year in Eskom National Diploma in Electronic Data B Sc (Hons) Biochemistry (University of BA (Hons) Psychology (University of B Com Accounting (Unisa), MBA (Gordon Processing (Tygerberg Technical College), Zululand), Master of Business Leadership Johannesburg), MBA (University of Pretoria), Institute of Business Science) Global Information and Telecommunications Industries (Insead Business School), Delivering (Unisa), Postgraduate Diploma in Financial PhD Business (University of Cape Town) Information Services and Information Strategy (University of Oxford) Technology (Harvard Business School) Demographics Age diversity Exco meeting attendance Years of service 9% (60+) 0–9 years 7 64% 6 3 2 36% (40–49) 14 10–19 years 20–29 years 1 9% 3 27% ACI ACI White 89% Exco meetings held during males females males the year (2024: 20) ACI refers to African, Coloured and Indian population groups. Ages are shown at 31 March 2025. 55% (50–59) 17 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Executive Management Committee at 31 March 2025 continued CHANGES TO EXECUTIVE MANAGEMENT The Executive Management Committee (Exco) is established by the GCE and is accountable for executing Eskom’s strategy and managing day-to-day operations. Exco is supported by several subcommittees.  he subcommittees of Exco are shown on page 10 IR T In May 2024, the GCE announced a new Exco structure to address prevailing business challenges and future- proof Eskom to enable growth and long-term sustainability, including focusing on the expansion of Eskom’s renewable energy portfolio in line with our Just Energy Transition strategy. The following appointments were made to fill the new Exco structure: • Roman Crookes as Group Executive: Group Capital (1 November 2024) RIVONINGO MNISI (43) BHEKI NXUMALO (56) • Len de Villiers as Chief Technology and Information Officer (1 November 2024 on a three-year contract) Group Executive: Renewables Group Executive: Generation • Nontokozo Hadebe as Group Executive: Strategy and Sustainability (1 November 2024) Appointed to Exco in February 2025 Appointed to Exco in June 2023 • Portia Mngomezulu as Group Executive: Corporate Services (1 November 2024) <1 year in Eskom 28 years in Eskom • Alfred Seema as Group Executive: Strategic Delivery (1 December 2024) B Tech Industrial Engineering (University of National Higher Diploma in Chemical • Rivoningo Mnisi as Group Executive: Renewables (1 February 2025) Johannesburg), B Sc (Hons) Applied Science Engineering (Vaal University of Technology), • Dr Candice Hartley as Chief People Officer (1 March 2025) (University of Pretoria), MBA (Gordon MBA (North West University) Institute of Business Science) The executive team is now fully capacitated to deliver on Eskom’s strategy. Skills and experience In addition, the following Exco changes took place during the year and subsequent to year end: Climate change 5 • Sthembiso Vezi served as acting Group Executive: Legal and Compliance from 1 April 2024. and environment Thereafter, Jerome Mthembu was appointed as Head of Legal and Compliance from 1 May 2024. Since Economics implementation of the new Exco structure from 1 November 2024, Jerome Mthembu no longer serves as 2 and regulation a member of Exco but remains a permanent invitee Engineering, science • The fixed-term contract of Vuyolwethu Tuku, Group Executive: Transformation Management Office, 8 and technology ended on 30 June 2024; the position was removed from the organisational structure Financial reporting, • Segomoco Scheppers, former Group Executive: Transmission, served as the interim CEO of NTCSA audit and controls 5 since the subsidiary commenced trading from 1 July 2024; he no longer serves as a member of Exco. His secondment to NTCSA concluded on 31 July 2025. The NTCSA board approved the secondment of Funding and 8 Monde Bala, Group Executive: Distribution, to the role of interim CEO of NTCSA from 1 August 2025. ALFRED SEEMA (52) capital allocation Agnes Mlambo is acting as Group Executive: Distribution Group Executive: Strategic Delivery Governance 6 • Elsie Pule, Group Executive: Human Resources, retired early on 31 July 2024 by mutual agreement. Appointed to Exco in December 2024 and ethics To ensure leadership stability and business continuity, Monde Bala acted in the position, in addition to his <1 year in Eskom Information and role as Group Executive: Distribution, until the Chief People Officer was appointed on 1 March 2025 4 B Sc Chemical Engineering (University of operational technology • Since implementation of the new Exco structure from 1 November 2024, Natasha Sithole, former Group Cape Town), MBA (Henley Business School), Executive: Government and Regulatory Affairs (acting), Jainthree Sankar, former Chief Procurement Infrastructure and B Com Financial Management (Unisa) project management 7 Officer, as well as Faith Burn, former Chief Information Officer, no longer served as members of Exco. Jainthree Sankar and Faith Burn have since left the organisation Legal and 3 compliance Exco is supported by the following permanent invitees: Operations and 7 • Tembela Kulu, General Manager: Investigations and Security (appointed during the year from 1 October 2024) maintenance • Jerome Mthembu, Head of Legal and Compliance (appointed during the year from 1 May 2024) People management, • Ureka Rangasamy, Chief Audit Executive (appointed from 1 January 2024) 9 health and safety Stakeholder relations The group executives for Generation and Distribution serve as the divisional managing directors of their 9 respective divisional boards within the Eskom company until the separate subsidiaries commence trading. and change management Strategy and 10 Ages are shown at 31 March 2025. risk management 18 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Identifying key topics We apply the principle of double materiality in our integrated report, Item Material matter Description Link to Board priorities by considering both external factors that may affect our financial performance (financial materiality) and internal factors through which Strengthening leadership Establishing consistent, capable and ethical leadership to drive strategic direction, Leadership M1 we impact the broader environment and society (impact materiality). ensure sound decision-making and foster organisational stability. Strong leadership is In addition, we assess both qualitative and quantitative matters that are essential to navigate challenges, rebuild trust and embed a high-performance, ethical material to our operations, strategic objectives, organisational risks and culture aligned to Eskom’s values opportunities, the Board’s focus areas and the six capitals. Securing financial Ensuring long-term financial viability by strengthening revenue generation, controlling Operational stability M2 sustainability through costs and securing an adequate tariff path that balances affordability with Eskom’s Financial position Focusing on material matters aligns our efforts with the most critical adequate tariffs, financial sustainability. This includes maintaining adequate liquidity to meet short- to environmental, social and governance (ESG) priorities – those that, if not disciplined cost medium-term obligations and sustaining operations as a going concern. Improving Stakeholders effectively managed, could significantly affect long-term sustainability and management and operational performance positively impacts financial results through higher sales and value creation. Government-led revenue and lower operating costs. Success depends on continued support through programmes the amended R230 billion Government debt relief programme and effective Material matters are high-likelihood, high-impact factors that significantly resolution of arrear municipal debt, which stood at R94.6 billion at year end, through influence the creation, preservation or erosion of enterprise value across targeted interventions. Alternate funding mechanisms will be used to fund future short-, medium- and long-term horizons. These may be either positive or capital projects to reduce the requirement for on-balance sheet funding negative in nature. Achieving operational Enhancing the reliability and resilience of generation and network operations to Leadership M3 These matters were identified through a structured process that excellence to permanently ensure a secure and consistent electricity supply. This includes improving performance Operational stability considered: end the electricity crisis of our infrastructure, expanding generating capacity through Eskom’s new build programme and connecting IPPs, and securing primary energy and water resources. Financial position • Continuity or evolution of prior-year material matters Achieving operational excellence depends on sufficient liquidity to plan and execute Legal separation • Shifts in the external operating environment maintenance and outages effectively. Consistently overcoming the need for Private sector participation • Stakeholder concerns and expectations loadshedding not only supports economic activity, but also improves revenue Crime and corruption • Strategic risks and opportunities generation through higher sales Stakeholders • Key issues deliberated by the Board • The likelihood and potential consequences of the matters Enhancing environmental Strengthening compliance with environmental regulations while actively reducing our Operational stability M4 stewardship environmental footprint through sustainable practices, emissions reduction and the Financial position adoption of renewable energy initiatives. Proactive environmental stewardship Stakeholders The Audit Committee considered the matters identified and supports long-term operational viability and enhances stakeholder trust set out below for inclusion in the integrated report, which Building a skilled Developing and retaining a capable, future-ready workforce while embedding a Leadership M5 have been linked to the following Board priorities: workforce within a high-performance, ethical culture and accountability. This is essential to drive Stakeholders • Stabilising the leadership team and strengthening the high-performance, ethical operational excellence, foster agility and innovation, and ensure long-term culture organisational resilience leadership pipeline Furthering national Supporting national development priorities through workforce transformation, Operational stability • Driving the operational turnaround to resolve the M6 developmental goals Government-funded electrification initiatives, inclusive procurement practices and Crime and corruption electricity crisis and thereafter, achieve stability and corporate social investment (CSI) programmes. These efforts contribute to reliability socio-economic upliftment and reinforce Eskom’s role as a strategic enabler of South Stakeholders • Securing Eskom’s financial position and prioritising the Africa’s developmental agenda reduction of arrear municipal debt Executing the legal Advancing the legal separation of Eskom’s core business units in line with Legal separation M7 • Implementing the legal separation and positioning Eskom separation of the Government’s Roadmap. This involves establishing separate subsidiaries for the Private sector participation generation, transmission generation, transmission and distribution businesses to improve operational efficiency, within the transforming electricity industry Stakeholders and distribution enhance transparency and strengthen accountability. The separation is a critical • Enabling private sector participation in transmission businesses enabler of industry transformation and Eskom’s long-term sustainability network expansion and Eskom Green initiatives • Fighting crime, fraud and corruption • Reconnecting and engaging with stakeholders 19 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Identifying key topics continued Item Material matter Description Link to Board priorities Creating the Eskom of the Building a resilient and future-ready utility that delivers energy security in the evolving Operational stability M8 future electricity industry demands customer-focused products and services to meet Financial position changing needs, enhanced grid capacity and access, and clean energy business models. It relies on modern tariff structures and market codes, as well as digital technologies Private sector participation to optimise operations Stakeholders Advancing climate action Covers our adaptation strategies and actions in response to climate change to ensure Operational stability M9 that the impact on our operations are minimised and that our long-term sustainability Legal separation is not negatively affected. It includes reducing carbon emissions and transitioning to cleaner energy sources through Eskom Green. It further includes promoting a Private sector participation sustainable and equitable energy transition aligned to the goals of the Paris Stakeholders Agreement and South Africa’s Nationally Determined Contribution Upholding governance, Reinforcing robust governance frameworks and ensuring full compliance with Operational stability M10 compliance and ethics applicable laws, regulations and standards. This includes promoting transparency, Financial position accountability and ethical behaviour across all levels of the organisation to restore stakeholder confidence and support long-term sustainability Stakeholders Fighting crime, fraud and Proactively addressing fraud, corruption and criminal activity is essential to restoring Operational stability M11 corruption organisational integrity, improving operational performance and rebuilding stakeholder Financial position confidence. These efforts are critical to enabling a successful turnaround and ensuring long-term sustainability Crime and corruption Stakeholders 20 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Connecting with stakeholders Our commitment to sustainable practices enables Exco is responsible for the following, as delegated The diagram below sets out our various stakeholders, categorised as authorisers, enablers, influencers or the organisation to create value not only for Eskom, by SES: partners, depending on their role. but also for the broader society in which we operate. • Serving as the custodian of Eskom’s key stakeholder Stakeholder engagement is central to shaping our relationships, with executives assigned to specific business strategy and direction, and for achieving our stakeholders via a stakeholder matrix Influencers Authorisers Enablers Partners strategic objectives. • Overseeing and monitoring engagement performance through weekly briefings and Recognising our exposure to reputational risk and Set direction for the Provide operational Provide the platform to The relationship between quarterly reports varying levels of stakeholder support, we actively company support and resources guide, share and shape various organisations to do mitigate these risks through continuous engagement • Tracking and responding to non-technical risks opinions trade or business and the implementation of strategic communication through a weekly issues forum Minister of Electricity Department of Public Intergovernmental Business formations plans. We engage proactively and transparently • Evaluating the impact of short-, medium- and long- and Energy Works and Infrastructure platforms BUSA, BLSA, BMF, SACCI with stakeholders to meet their expectations while term engagements, with actionable plans to address Nedlac, B4SA, NECOM, BBC carefully managing the impact of our operations. areas which require improvement National Treasury Provincial and local Energy Council, Presidential government Climate Change International partnership Department of Through continuous evaluation and benchmarking, RESPONDING TO STAKEHOLDERS Commission, SALGA, group Fisheries, Forestry and Suppliers, contractors BRICS, Denmark, US, French, we aim to strengthen trust, deepen relationships and We have developed a comprehensive stakeholder SANEA, NBI Environment Seriti, Exxaro, etc Netherlands, Swedish, deliver positive outcomes for all stakeholders. engagement framework based on a clear understanding of stakeholder concerns and the Department of Trade, Department of Association for municipal Germany, UK and EU RESPONSIBILITY FOR STAKEHOLDER organisation’s strategic direction. This framework Industry and Cooperative Governance electricity utilities Investors, rating agencies ENGAGEMENT encompasses relationship management, proactive Competition and Traditional Affairs South African Local Banks, Economists, JSE, In alignment with the King IV governance principles, strategic engagement, transparent communication and Department of Water Employment/labour Government Association monetaryy funds, Reserve Eskom has adopted a stakeholder-centric governance collaborative partnerships – each of which is essential and Sanitation Num, Numsa, Solidarity Bank, DFIs, etc model that emphasises accountability, transparency to building trust, supporting our strategic objectives Industry associations and managing organisational risk. Department of EIUG, FAPA, Minerals Trading partners and responsiveness. The Board recognises the Government bodies Minerals Resources and SITA, IDC, DBSA, Council, IAEA, SEIFSA Mozambique, Namibia, importance of being accountable to stakeholders We are addressing immediate challenges and laying Petroleum NECSA, STATSA, Zimbabwe, SAPP, Sasol for the organisation’s performance and long-term Academia sustainability. the foundation for a sustainable and inclusive energy SANEDI SITA, universities, research Social training partners National Electricity future for the country and the region. Through institutions, energy experts Impact catalyst, development Regulator of South Industry bodies The King IV principles guiding our approach include: strategic partnerships, proactive media engagement Africa SAWEA, SAPVIA, corporations, training and inclusive dialogues, our stakeholder engagement Civil society • Inclusivity SARETEC institutions and communication initiatives are restoring public National Nuclear Climate coalitions, OUTA • Materiality Communities trust and enhancing our reputation, securing Regulator Government security • Responsiveness Mpumalanga, etc investment and driving the energy transition. Parliament structures • Impact NatJoints • Transparency The Board adopts a stakeholder-inclusive approach to balance the needs, interests and expectations of material stakeholders in Eskom’s long-term best interest. The Social, Ethics and Sustainability Committee (SES) is accountable for oversight of stakeholder relationships and execution of the stakeholder engagement plan. Other Board committees, such as the Business Operations Performance Committee and Governance and Strategy Committee also oversee aspects of stakeholder engagement relevant to their terms of reference. 21 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Connecting with stakeholders continued Management of stakeholder concerns is a key risk We have also strengthened partnerships with STAKEHOLDER LANDSCAPE category, with defined treatment plans in place. We industry stakeholders and international counterparts Our stakeholder groups represent a diverse range of value feedback as a cornerstone of transparency and by participating in high-profile events, such as interests, concerns and expectations: accountability, and address stakeholder concerns African Energy Week and COP29 held in Baku, • Investors focus on financial returns, long-term through structured oversight and informed decision- Azerbaijan. We concluded cross-border power supply stability and predictability making. We recognise that our social licence to agreements with Mozambique and eSwatini, with • Government agencies and regulatory bodies operate is closely tied to our reputation and the ongoing discussions with Zimbabwe’s ZESA. Eskom's emphasise compliance and effective policy strength of our stakeholder relationships. focus on technology and innovation is evident through implementation collaborative partnerships with entities such as Sasol We have maintained strong relationships with • Customers prioritise access to reliable and and Golden Arrow Bus Service, that aim to develop national and provincial government departments, affordable electricity electric vehicle infrastructure, gas-to-power projects parliamentary committees and regulatory bodies. and cutting-edge grid initiatives. • Employees value job security, career development We actively participated in NERSA’s MYPD 6 tariff and a supportive work environment, as well as application public hearings, advocating for unbundled Eskom’s Media Desk continues to leverage social the pride of associating with an organisation that tariffs that balance affordability with Eskom’s financial media platforms to monitor stakeholder sentiment consistently delivers on its commercial and social sustainability, and supported industry reforms and track emerging conversations, growing our mandate and purpose in discussions on Government’s draft Integrated presence significantly. By analysing media trends and • Local communities are concerned about the social Resource Plan. Additionally, collaborative efforts public discourse, the team generates valuable insights and environmental impacts of our operations with national and provincial governments resulted in that inform stakeholder engagement strategies and • Environmental organisations advocate for the structured repayment plans and legal settlements with enhance transparency. adoption of sustainable practices defaulting municipalities. Effective media management plays a pivotal role in The table below outlines our various stakeholder Eskom's leadership has actively engaged with both local rebuilding trust and strengthening relationships with groups and their significance. It also identifies their and international investors in preparation for a return the public and other key stakeholders. It enables respective concerns and our responses to those to the capital markets once the debt relief period has Eskom to proactively address concerns, share timely concerns. Additionally, we illustrate the connection to ended to bolster confidence in our strategic objectives. updates and reinforce our commitment to open the material matters we’ve identified. communication. Based on an analysis of media and We highlighted our strategic direction and financial customer sentiment, we have seen a significant shift recovery efforts at key events such as the SA Tomorrow in media sentiment over the past year, remaining Investor Conference in London, Moody’s Risk Summit, predominantly positive, mainly due to the ongoing and the Standard Bank Climate Summit. In partnership suspension of loadshedding despite occasional and with the JSE and the Presidential Climate Change temporary setbacks, updates on our operational Commission, we participated in roundtable discussions recovery and enhanced leadership visibility. Reports to secure funding from the National Treasury of arrests and convictions relating to crime, fraud and Corporation and the Securities Association for grid corruption are also viewed positively. management projects. These strategic partnerships exemplify how our stakeholder engagement efforts align with our broader objectives. We have made progress in furthering our Just Energy Transition (JET) agenda by collaborating with the Netherlands, Germany and France, which resulted in a significant grant from the French Development Agency towards the Tubatse Pumped Storage Scheme. 22 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Connecting with stakeholders continued Stakeholder Impact on value creation Key concerns Our response Link to material matters Material matters Business and suppliers Contribute to operational Fair competition, ethical Implementation of transparent Leadership strength Organisations involved in efficiency and business business practices, crime and procurement processes, adherence to Financial sustainability M1 Strengthening leadership business activities and continuity through participation corruption, supply chain ethical supplier guidelines, and Operational excellence supply chain in Eskom’s supply chain and reliability, impact of proactive risk mitigation in supply Environmental stewardship commercial activities loadshedding chain operations Skilled workforce M2 Securing financial sustainability Developmental goals Legal separation M3 Achieving operational excellence Future Eskom Climate action Governance and ethics M4 Enhancing environmental stewardship Crime and corruption Civil society Serve as advocates for social Environmental degradation, Active engagement on environmental Operational excellence M5 Building a skilled workforce Non-governmental justice and environmental social responsibility, socio- and social issues, implementation of Environmental stewardship organisations and stewardship, influencing public economic effects of sustainable development initiatives, Developmental goals M6 Furthering national developmental goals community groups sentiment and holding Eskom loadshedding, impact of crime, advancement of clean energy Future Eskom accountable for its societal fraud and corruption alternatives, collaboration with Climate action impact community groups Crime and corruption M7 Executing the legal separation Customers Directly influence Eskom’s Reliability of electricity supply, Strengthening service reliability, Financial sustainability Individuals and entities revenue, service delivery affordability, impact of promoting tariff affordability and free Operational excellence M8 Creating the Eskom of the future consuming Eskom’s standards and public trust loadshedding, clarity on future basic electricity, ensuring transparent Future Eskom products and services through their consumption tariff structures communication on pricing and service Climate action M9 Advancing climate action patterns and satisfaction levels developments, focus on customer Crime and corruption centricity M10 Upholding governance, compliance and ethics Employees Drive operational performance, Job security, employee benefits, Review of employee benefits and Leadership strength Our workforce agility and innovation, working conditions, wellbeing, rewards, employee wellbeing Financial sustainability organisational culture and career development and initiatives, skills development Operational excellence M11 Fighting crime, fraud and corruption Eskom’s values, serving as the training, operational impact of programmes, adherence to ethical and Environmental stewardship foundation of long-term loadshedding compliance frameworks Skilled workforce sustainability Developmental goals Legal separation Future Eskom Climate action Governance and ethics Crime and corruption Government Provide policy direction, Alignment with national energy Active collaboration on policy Leadership strength Oversight and policy- regulatory oversight and policy, economic impact, development, implementation of debt Financial sustainability making entities financial support that are financial and operational relief measures, support for sustainable Operational excellence essential to Eskom’s operational sustainability, impact of energy initiatives, and progress on legal Environmental stewardship and strategic sustainability loadshedding, environmental separation Skilled workforce compliance, progress on legal Developmental goals separation, climate change Legal separation commitments, combatting Future Eskom corruption Climate action Governance and ethics Crime and corruption 23 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Connecting with stakeholders continued Stakeholder Impact on value creation Key concerns Our response Link to material matters Investors Provide funding that supports Financial performance, return Transparent financial reporting, Leadership strength Investors, bondholders, Eskom’s asset base, financial on investment, operational and adherence to debt relief measures, Financial sustainability lenders and ratings sustainability and long-term financial sustainability, tariff regular updates on legal separation Operational excellence agencies strategic direction certainty, legal separation, and the audit recovery programme, Environmental stewardship climate change commitments, climate-related goals Skilled workforce impact of corruption Legal separation Future Eskom Climate action Governance and ethics Crime and corruption Media Influence public perception, Transparency and accuracy of Timely and accurate sharing of Leadership strength Journalists and media shape stakeholder sentiment, information, societal impact of information, proactive media Financial sustainability outlets and hold Eskom accountable loadshedding, legal separation engagement on key initiatives, Operational excellence through information progress consistent messaging to build public Skilled workforce dissemination and investigative trust Legal separation reporting Governance and ethics Crime and corruption Parliamentary Provide oversight on Eskom’s Financial and operational Transparent reporting on financial and Financial sustainability committees governance, financial sustainability, governance and operational performance and Operational excellence Multi-party committees management and operational compliance, environmental governance practices, adherence to Environmental stewardship overseeing our operations performance, ensuring stewardship, progress on legal debt relief measures, regular Legal separation accountability to the public and separation, governance and engagement on the legal separation Climate action Government ethics, combatting corruption and the audit recovery programme, Governance and ethics updates on other matters as requested Crime and corruption Regulators Ensure Eskom’s compliance with Financial and operational Active participation in regulatory Financial sustainability Entities responsible for legal, environmental and sustainability, tariff consultations, adherence to Operational excellence regulating our activities economic regulations, while methodology, environmental environmental regulations, Environmental stewardship promoting fair competition and stewardship, climate change implementation of sustainable Future Eskom protecting consumer interests mitigation practices and climate strategies Climate action International groups Offer global perspectives, Sustainable development, Active collaboration on the United Operational excellence Global organisations and promote knowledge exchange climate change mitigation, Nations Sustainable Development Environmental stewardship associations and support Eskom’s alignment alignment with global best Goals (SDGs), implementation of Future Eskom with international sustainability practices climate action strategies, participation Climate action and climate goals in regional and global energy forums Governance and ethics Crime and corruption 24 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Thoughts from our leadership Message from the Chairman 26 Chief Executive’s review 29 Chief Financial Officer’s commentary 33 25 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Message from the Chairman economic pressures, rising levels of electricity theft, and the Black Business Quarterly with the Public Sector the others are aimed at transforming Eskom and the an increase in embedded self-generation in response to Visionary Award for his exceptional leadership at industry toward a sustainable energy future. Overall, loadshedding and the need to decarbonise. Municipal Eskom, confirming him as the perfect candidate to these bring a sharper focus on operational recovery, arrear debt had escalated to unprecedented levels, lead Eskom out of the energy crisis and through the financial sustainability and the transition to a low- undermining Eskom’s financial position and threatening transformation of the electricity supply industry, carbon, customer-centric energy future where Eskom the viability of the entire electricity supply industry. toward a future that guarantees energy security, can compete on a level playing field. access and affordability for South Africa. His efforts The business model was outdated, and the have supported key socio-economic programmes, DRIVING OPERATIONAL RECOVERY TO END organisational culture was characterised by low advanced transformation and positioned Eskom as a LOADSHEDDING morale, skills gaps and a lack of trust in leadership, sustainable, investable company ready to compete in Some say that it’s easy to dream – all you have to do due in part to a succession of chief executives over a liberalised, competitive energy market. is go to sleep. But the real challenge is to turn those the previous decade. The legacy of state capture dreams into reality, by demonstrating the stamina to lingered, with crime, fraud and corruption – aided Within his first year, Dan ensured that the Exco team implement your plans and strategies to reach your by a lack of adherence to internal controls – eroding was fully capacitated to provide the level of leadership goals. That is what the Board had to focus on to stakeholder confidence. Eskom also found itself in required by an organisation of Eskom’s size, by address the Eskom crisis. the midst of an ongoing global energy transition, with appointing six group executives and the Chief People mounting pressure to decarbonise and comply with Officer. The development and implementation of the evolving environmental standards. Generation Recovery Plan marked a clear turning RESPONDING TO ESKOM’S CHANGING point. Supported by the Board and externally GUIDING THE TURNAROUND THROUGH CONTEXT stress-tested, the plan focused on improving energy As I reflect on Eskom’s journey over the past three EFFECTIVE LEADERSHIP The past year has been marked by significant changes availability and plant reliability. By January 2025, years, I am reminded of the immense responsibility Recognising the urgency of the situation, the Board in Eskom’s operating environment. Globally, the Eskom had achieved 310 consecutive days without entrusted to the Board and the entire organisation to identified six priority focus areas to guide Eskom’s energy sector is transitioning toward decarbonisation, loadshedding – a milestone that would have seemed serve our country. When the Board assumed office turnaround: digitalisation, decentralisation and democratisation. unattainable just a few years ago. Winning the war in October 2022, Eskom was facing a convergence 1. Stabilising the leadership team and strengthening Geopolitical shifts, trade tensions and realignments against loadshedding was our north star and, except of systemic challenges that threatened not only its the leadership pipeline in climate finance have introduced new uncertainties. for a few temporary setbacks since then, we believe operational and financial sustainability, but also its Locally, the formation of South Africa’s Government our goal is now within reach. ability to fulfil its mandate as a vital pillar of South 2. Driving the operational turnaround to resolve the of National Unity in June 2024 has brought renewed Africa’s economy and society. electricity crisis and thereafter, achieve stability Substantial generation capacity was restored in recent political stability with a unified focus on energy reform. and reliability years, with over 5GW brought online through critical THE BOARD’S MANDATE: SOLVING SOUTH 3. Securing Eskom’s financial position and prioritising Eskom has responded by refocusing its strategy to projects at Medupi, Kusile and Koeberg. Regulatory AFRICA’S ENERGY CRISIS the reduction of arrear municipal debt align with these shifts. Our comprehensive review advancements unlocked an additional 3.5GW in grid We inherited an organisation grappling with extreme reaffirmed the strategic direction but highlighted the capacity, facilitating the integration of new supply by levels of loadshedding, unreliable coal-fired power 4. Implementing the legal separation and positioning need to recalibrate execution timelines and intensify IPPs. The Transmission Development Plan delivered stations and a transmission grid unable to connect new Eskom within the transforming electricity industry delivery against strategic objectives. Eskom is evolving new transmission lines and transformer capacity. We renewable capacity at the pace required to support 5. Fighting crime, fraud and corruption from a traditional utility to a resilient, future-ready also extended electricity access to disadvantaged economic stability and decarbonisation. Eskom’s 6. Reconnecting and engaging with stakeholders organisation that is able to confront challenges, unlock communities through about 300 000 new balance sheet was burdened by unsustainable levels of new opportunities and ensure long-term relevance electrification connections over the past three years. debt, compounded by tariffs that failed to provide a fair Our first step was to appoint strong, ethical leaders and sustainability, to the benefit of our customers and return on assets or reflect the true component costs at all levels, culminating in the appointment of Dan Digitalisation and automation projects have improved South Africa’s competitiveness. of electricity supply – covering generation, transmission Marokane as Group Chief Executive in March 2024. revenue collection and operational efficiency – these and distribution – to provide appropriate market With firm support from the Board, Dan’s leadership The strategy revolves around four core objectives: include the accelerated rollout of smart meters signals. NERSA also failed to deliver a predictable long- has been instrumental in driving operational recovery, (i) fixing the current business, (ii) preparing for and the Key Revision Number 2 rollover. These term tariff outlook to enable strategic planning and advancing legal separation and restoring stakeholder competition, (iii) modernising the power system, interventions have positioned Eskom on a clearer investment by both Eskom and our customers. Sales confidence while reinforcing Eskom’s commitment and (iv) transitioning responsibly. While the first path toward operational resilience and future growth. volumes had been declining for a decade, driven by to energy security. He was recently recognised by objective is focused on resolving the energy crisis, 26 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Message from the Chairman continued SECURING STANDALONE FINANCIAL declining sales volumes. To address this, Eskom is FOSTERING AN ETHICAL CULTURE TO and respond to irregularities. Strong partnerships SUSTAINABILITY pursuing new products and services toward new FIGHT CRIME, FRAUD AND CORRUPTION with law enforcement agencies have led to an Financial sustainability has been a central area of revenue streams. Lastly, the organisation is affected Restoring governance and integrity has been a increase in arrests and many successful prosecutions focus. The Board supervised the restructuring of the by the ongoing impact of crime, fraud and corruption, cornerstone of the Board’s agenda. Through the Social, of wrongdoers. Supplier review processes have assurance and forensics functions, ensured that internal and we are intensifying our efforts to prevent, detect, Ethics and Sustainability Committee, we have overseen been strengthened, with sanctions and blocks on controls were strengthened and monitored the audit investigate and correct unlawful behaviour. the governance of ethics, by aligning with King IV suppliers being implemented when non-compliance recovery programme to strengthen compliance and principles and upholding a zero-tolerance approach to is confirmed. Eskom’s fraud prevention plans and improve audit outcomes. Government debt relief TRANSFORMING ESKOM AND THE unethical conduct. Eskom’s Code of Ethics, “The Way”, awareness campaigns extend to employees and support, new tariff structures, higher sales linked to the INDUSTRY THROUGH LEGAL SEPARATION underpins the organisation’s values-driven culture and suppliers alike. operational turnaround and cost optimisation initiatives One of the most significant undertakings during the guides behaviour at all levels. have contributed to Eskom recording its first profit in Board’s term has been driving the legal separation Despite measurable progress, the battle is far from eight years, resulting in a more positive outlook from of Eskom’s business units, a process central to the The Ethics Office has implemented a revised ethics over. The Board remains committed to shifting rating agencies and improved credit ratings. The profit, transformation of the electricity supply industry. management strategy, informed by independent risk Eskom from responding reactively, to proactive and the resulting improved liquidity, will be reinvested The operationalisation of NTCSA in July 2024 as the assessments and supported by mandatory annual and structural prevention measures, in addition to in the business, chiefly in the form of expansionary interim Transmission System Operator marked a ethics training. Policies regulating the management of promoting a culture of accountability, transparency capital expenditure – Calib will expand on this in the critical milestone, enabling grid access for all market conflicts of interest and private work by employees and operational discipline through adherence to CFO’s report. participants and facilitating the development of a ensure transparency, with near-perfect completion Eskom’s well-established processes. competitive electricity market that still lacks clear rules. rates for annual declarations. Robust whistle-blowing Through enhanced focus and Board oversight, mechanisms protect those who speak up against IR Refer to “Leveraging governance for transformation – Eskom improved the FY2025 audit outcome, with The Transmission Development Plan calls for misconduct and criminality, fostering a culture of Assessing the Board’s impact over its entire the results being finalised earlier than the previous substantial grid expansion, with the draft Integrated accountability and openness. term” from page 55 for more information on the year. Although this is not yet where we want to be, Resource Plan prioritising solar PV and wind as Board’s actions over its term and the focus areas we acknowledge management’s efforts to address dominant new generation sources. The establishment The Board’s interventions to fight crime, fraud recommended for the next term the systemic audit challenges through better audit of Eskom Green as a renewable energy subsidiary and corruption have been extensive. We have preparation and by timeously resolving audit findings. will position Eskom to leverage its formidable skills strengthened organisational structures; enhanced In the longer term, the aim is to produce audited and accelerate participation in the green economy, mechanisms to prevent, detect, investigate SUSTAINING THE TURNAROUND AND financial statements within legislative timeframes and in support of South Africa’s transition to net-zero and correct wrongdoing and irregularities; and POSITIONING ESKOM FOR THE FUTURE to obtain an unqualified audit opinion in coming years. emissions by 2050. implemented long-term reforms. The Group Even though we believe we have made commendable Investigations and Security Department consolidates progress in stabilising operations and improving Despite these gains, considerable challenges remain. The legal separation of the distribution business, forensic, security and investigative efforts, aimed financial performance, as well as enhancing Firstly, tariffs remain below the levels required for through the creation of NEDCSA, is progressing, at streamlining processes and strengthening stakeholder confidence, several considerable long-term sustainability and lack a predictable long- albeit with challenges related to municipal arrear debt consequence management. A Rapid Response challenges remain. Continued focus and innovation term outlook. In response to our customers’ pleas, affecting the entire organisation’s financial sustainability, Unit and Project Management Office accelerate is required to address increasingly unsustainable we will continue to review our cost base and strictly coupled with external dependencies. The Board has investigations and disciplinary cases, prioritising high- levels of municipal arrear debt, tariff challenges and control costs to find efficiencies and ensure that we worked closely with Government, regulators and impact and infrastructure crimes. Although most of funding the imperative to decarbonise in line with don’t exceed single-digit tariff increases. Secondly, stakeholders to navigate these complexities, ensuring Eskom’s roughly 42 000 employees are honest and national and global commitments. The Board has municipal arrear debt continues to escalate, and in that Eskom remains resilient and competitive in a dedicated, a small minority is engaged in criminal embedded a robust risk management framework to response, we are pursuing innovative solutions, such liberalised, decarbonising and increasingly competitive activities, and they must be identified and dealt with identify, monitor and mitigate strategic risks across as the distribution agency agreement framework, market supported by rules-based reforms. The market decisively. the organisation. The establishment of a separate to improve revenue collection, but broader political cannot be driven by self-interest but must be guided Board Risk Committee in February 2025 is expected intervention is needed to reverse the escalating by clear principles that support a sustainable solution Advanced analytics, improved enterprise resource to enhance focus, oversight and accountability for risk trend in municipal arrear debt over the past decade. to South Africa’s energy needs, coupled with clear-cut and procurement systems, and enhanced detection management throughout Eskom. Financial sustainability is further compromised by protection for the millions of vulnerable consumers. capabilities have bolstered the ability to prevent 27 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Message from the Chairman continued Throughout our term, the Board has guided Eskom’s Our country is experiencing a rapid decline in many turnaround with unwavering commitment to ethical areas. I believe the root cause of this is a dearth leadership, operational excellence and stakeholder of ethical and capable leaders. However, Eskom’s value. We have demonstrated the ability to confront turnaround demonstrates that it is within our power systemic challenges, drive transformation and position to fix our beautiful country – we can create the Eskom for long-term success in a rapidly evolving country of our dreams. We can ensure that future energy landscape. Eskom’s enabling functions – generations are better off than previous ones; that governance, technology, finance, human resources, is what I call perpetual progress. But to achieve this procurement, legal, stakeholder engagement and goal, we must pay attention to the type of leaders we strategic delivery – are foundational to the successful entrust with leading our institutions and our society. execution of strategic initiatives. Alternative funding Leadership matters. models and strategic partnerships are critical to fast- tracking the infrastructure rollout and enabling the To my fellow Board members, I am incredibly grateful Just Energy Transition, while ensuring that electricity for their invaluable support, wisdom and unwavering remains reliable, affordable and sustainable. dedication throughout this challenging period. Their collective insight, resilience and commitment to To support Eskom’s future success, the Board remains Eskom’s mission have been crucial in guiding the committed to further embedding good governance turnaround. Although we’ve had to face significant principles that support ethical leadership, sound challenges, with an elevated level of governance corporate citizenship and sustainable value creation demands that few boards will ever have to face, the beyond this term. Leadership development remains a progress we have achieved is a testament to their key priority, together with building a sustainable pipeline belief in Eskom and the positive difference we can through tailored executive programmes delivered by make together. Leslie Mkhabela’s appointment in Eskom’s newly established Dr RJ Khoza Leadership January 2025 as lead independent director is further Development Centre. In addition, the appointment supporting the Board in leading Eskom into the future. of independent non-executive directors across all subsidiaries is crucial to enhance governance oversight in A reliable electricity supply is essential to powering line with Eskom’s subsidiary parenting strategy. economic growth, which creates opportunities Let us remember that our success will be defined, to sustain livelihoods and uplift communities, and not just by individual achievements, but by how we Looking forward, we must sustain the positive promotes national progress. At the end of the day, collaborate and work as a unified team. Eskom’s momentum achieved, deepen our impact and ensure the answer to the electricity crisis was simple – the journey towards stability and reliability is not without that Eskom continues to deliver on its mandate for Minister is aligned to the Board, and the Board is its ups and downs, but I am confident that greatness the benefit of all South Africans. The journey is far aligned to Exco. The strong and unified Exco team is possible when we strive toward a common goal. from over, but the foundations we have laid during is aligned to Eskom’s operational managers and, Together, we will continue to forge ahead, fuelled by our term will enable Eskom to thrive in a transformed by extension, the entire workforce. As a result, the energy that has already brought us so far. With electricity industry. morale and commitment have improved across the continued dedication of every single Guardian, we the organisation. can reach even greater heights. CONCLUDING REMARKS I would like to extend my heartfelt gratitude to Eskom’s recovery from the electricity crisis would Minister Kgosientsho Ramokgopa for his steadfast not have been possible without the tens of support and visionary leadership throughout Eskom’s thousands of dedicated Eskom Guardians across turnaround journey. His unwavering commitment the organisation who work tirelessly to keep the has been instrumental, not only in guiding Eskom’s lights on for South Africa. To sustain the progress recovery, but also in shaping the future of South and position Eskom for the future, we need to Mteto Nyati Africa’s energy sector. His integrity and selflessness continue embedding a high-performance culture Chairman inspire all of us to rise above obstacles and work to meet Eskom’s challenges head on, by cultivating collectively for the greater good of our country. South resilience, excellence and accountability supported Africa is fortunate to have leaders like him. by appropriate reward strategies. 28 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Chief Executive’s review spanning 13 days. In August 2025, we reached For much of the past decade, Eskom has grappled PROGRESS IN FY2025: OPERATIONAL 100 days without loadshedding, and in September, with declining generation plant performance leading RECOVERY AND STRATEGIC MILESTONES we achieved the lowest level of unplanned generation to frequent loadshedding at much higher levels than Given the positive shifts we’ve seen during the plant unavailability in almost a decade, with unplanned seen previously. This, together with unsustainable past year, we acknowledged that we’re seeing the unavailability falling below 6 000MW. levels of debt, inadequate tariffs, above-inflation beginnings of a positive spiral. The debt relief we cost increases and escalating municipal arrear debt, received from Government helped to improve This is truly a remarkable improvement from the culminated in severely constrained liquidity, which in liquidity, as it freed up cash from operations to be 329 days of loadshedding in FY2024, and a stepping turn further constrained operational performance. invested in the business, rather than service debt. stone to longer-term uninterrupted power supply. These challenges were compounded by systemic risks Due to improved planning, which was facilitated by That journey is crucial, as a stable electricity supply affecting our operations, including crime, fraud and better liquidity, together with the investment in plant plays a vital role in the economic growth of South corruption, while the urgent need to decarbonise to improve the efficiency of our plant, we started Africa and the future of both the country and Eskom. our energy mix in line with national and global seeing an improvement in operational performance. commitments added further pressure. That led to an increase in sales and a reduction in Customers and stakeholders have responded positively to the reduction in loadshedding and primary energy costs, due in large part to a reduction The energy crisis reached its peak in 2023 and 2024, in the use of expensive OCGTs. Coupled with the improvement in service reliability. Eskom’s reputation, with near-constant loadshedding disrupting the lives which had suffered in recent years, is being restored tariff increase for the year, this again led to improved of millions of South Africans and severely undermining financial performance, ultimately resulting in better through transparent communication, proactive economic growth. Our coal-fired fleet struggled engagement and the delivery of tangible results. We liquidity. This reinforces the point that finances with extreme levels of unplanned unavailability, and and operations cannot be separated, and that the recognise that stakeholder trust is both a privilege our reliance on expensive open-cycle gas turbines The progress Eskom has made with its turnaround performance in both areas is inextricably linked. and a responsibility, and we remain committed to (OCGTs) placed further strain on the organisation’s plan to stabilise energy security to the country rebuilding and sustaining what we destroyed through finances. Municipal arrear debt came close to provides potential investors with more reasons to our earlier poor performance. doubling during those two years, threatening the invest in our country and in turn, create jobs and promote prosperity for all. The concrete and ongoing financial sustainability of the entire business, not Restoring Eskom’s reputation and role in society is Improved delivery of the turnaround plan has boosted business only Distribution’s operations, and also complicating a high priority. We are implementing stakeholder liquidity confidence, with credit rating agencies and banks efforts to unbundle Eskom in line with Government’s engagement plans, strengthening collaboration with signalling that Eskom’s performance recovery is a Roadmap. government departments, and monitoring key market key contributor towards positive sentiments around developments. Transparent communication and Despite these formidable challenges, Eskom’s South Africa’s GDP growth prospects. proactive engagement are essential to rebuilding trust leadership and workforce remained steadfast in their Improved and credibility. commitment to recovery. We recognised that the Improved The CSIR estimated that the South African economy financial lost up to R2.8 trillion due to loadshedding in the solutions to our problems lay within our organisation planning REFLECTING ON ESKOM’S JOURNEY OF performance 2023 calendar year. In 2024, that number reduced by – in the expertise, dedication and resilience of our LEARNING FROM PAST CHALLENGES people. The lessons learned during this period have 83% to R481 billion. Despite that improvement, we As I reflect on Eskom’s journey since my appointment, Government acknowledge that our generation plant performance informed our strategy, strengthened our governance debt relief I am reminded of the immense operational, financial and reinforced our determination to build a future- in recent years has been unacceptable, and we are and structural challenges we have faced as an grieved by the damage we caused to the economy ready Eskom. organisation and as a nation. The energy crisis that and the lives of all South Africans. gripped South Africa in recent years tested our Improved Improved I strongly believe that FY2025 represents a pivotal collective resilience, our resolve and our capacity moment in Eskom’s history. We have moved from operational investment in Since then, the continued hard work and dedication of Eskom’s employees have moved the utility far for innovation. Yet, it is precisely in the crucible of an extended period defined by crisis management performance assets along the path to operational sustainability. Through adversity that Eskom has demonstrated its ability to and operational instability to one characterised the concerted efforts of our people, we delivered adapt, recover and transform. by recovery, renewal and the pursuit of long-term 352 days of steady electricity supply in FY2025, with sustainability. This review is both a celebration of our loadshedding confined to only four separate instances achievements as an organisation, as well as a candid reflection on the work that remains to secure South Africa’s energy future in a liberalised, competitive energy marketplace. 29 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Chief Executive’s review continued OPERATIONAL ACHIEVEMENTS Our focus on plant performance has yielded tangible first priorities as GCE was to ensure that we had a proven to be the case, with the scheme being self- We have seen significant operational achievements results. Generating plant availability increased by fully capacitated Exco team to lead Eskom into the funded from improved operational cash flows, based in FY2025. Most notably, we had an uninterrupted around 6% year-on-year, supported by improved future, one that would drive operational recovery and on higher sales and a cheaper primary energy mix due run of 310 days without loadshedding up to outage planning, enhanced risk management and strategic transformation through fresh perspectives to much lower diesel use. Their performance over the 30 January 2025, which would not have seemed the adoption of advanced analytics for predictive and renewed energy. We were able to augment the past year has achieved a strong shift towards Eskom’s possible just a year ago. Although we dropped the maintenance. The reduction in reliance on OCGTs existing Exco members and thousands of dedicated long-term operational sustainability. ball on a few occasions in the final quarter of the year, has delivered substantial savings on diesel costs, employees to refocus and drive the growth and I am tremendously proud of what we have achieved improving both our financial position and our prospects of South Africa. Additionally, alignment of strategic objectives across through the efforts of our people. This sustained environmental footprint. the group will be reinforced by optimising the improvement in energy availability was driven by the There is no question in my mind that our progress performance management system and instituting disciplined execution of the Generation Recovery FINANCIAL TURNAROUND towards operational recovery and stability is rooted rigorous target setting, ensuring that individual Plan, targeted investments in maintenance, and the As I mentioned earlier, Eskom’s operational recovery in the expertise, commitment and resilience of and collective performance translates into tangible successful return of key units from long-term outages. has been supported by a positive financial turnaround. Eskom’s people. The skills of our employees across organisational impact. For the first time in years, the organisation has engineering, operations and maintenance functions In response to the isolated incidents of loadshedding returned to profitability, leading to improved liquidity have played a pivotal role in Eskom’s ability to Our commitment to ethical leadership and a high- between January and May 2025, management and a strengthened balance sheet. The Government’s structurally reduce the severity and frequency of performance culture is reflected in the continued conducted a root cause analysis of the events debt relief support covered most of our debt loadshedding over the past two years. Due to their implementation of our culture transformation contributing to those incidents and identified servicing obligations, allowing surplus cash from competence and dedication, we have turned a corner programme, which aligns leadership behaviours with interventions to prevent a recurrence of these issues, operations to be released for critical maintenance to the benefit of the country. Eskom’s values and supports targeted interventions in with support from Board’s Business Operations and infrastructure investment. Calib will go into detail learning, development and consequence management. Performance Committee. Several factors were in the CFO’s report about the financial results and Tragically, in that pursuit, one employee and two Leadership is at the heart of strategy: we can only found to have contributed, including an escalation progress against Eskom’s financial strategy, which was contractors lost their lives in the line of duty. I am deliver the best for our customers when we have the in unplanned breakdowns and a seasonal increase key to the turnaround. tremendously saddened by these losses. I cannot state right leadership skills in place. Therefore, we must in planned maintenance; extreme weather-related strongly enough that any loss of life in Eskom’s service act as role models – the success of our turnaround is disruptions to operations; high demand variability Our recovery efforts have included an intense focus is unacceptable – we must strive to ensure that every anchored in empowered leaders who can lead and caused by unpredictable renewable generation; on strengthening governance and improving audit employee, every contractor and every other person enable their teams to deliver with purpose. procurement and process inefficiencies; as well as outcomes by enhancing internal controls and driving engaged in Eskom’s operations return home safely to audit readiness. The implementation of the audit their loved ones at the end of each day. Our focus is on preparing Eskom for the future, human factors and skills deficits. The root cause recovery programme has delivered improvements in by building our skills base, succession planning, analysis has informed refinement of the Generation compliance, internal controls and risk management, With the support of the Board and the shareholder, skills development and diversity. This will ensure Recovery Plan, leading to the recently approved although it was initiated so late in the financial year we reintroduced a short-term incentive scheme to that we have the talent and capabilities needed to Generation Operational Reliability and Sustainability that it allowed for limited time to address FY2024 recognise and reward the efforts of our workforce navigate a rapidly changing energy landscape. Our Plan, reflecting a strategic shift toward long-term audit findings before the start of the FY2025 audit. for the remarkable turnaround we achieved in entire leadership development portfolio has been reliability and sustainability. The establishment of the Group Investigations and FY2025. The scheme is based on affordability with meticulously reviewed and redesigned to align with I am particularly proud to celebrate the return Security unit has enhanced our ability to proactively a scorecard tied to both financial and operational our strategic priorities, given that we are preparing of Medupi Unit 4 to service in July 2025. This address crime, fraud and corruption, working in performance. I acknowledge that many stakeholders for a competitive marketplace that requires different achievement not only restored critical capacity to the tandem with the Ethics Office and Internal Audit. would challenge this step. To them I say: show me skill sets for leaders to succeed. grid but also symbolises Eskom’s ability to overcome any organisation that does not reward its people technical and operational setbacks through teamwork, PEOPLE, CULTURE AND LEADERSHIP for as tremendous a turnaround as we’ve achieved. innovation and perseverance. The commercial Just like the Board when it took over three years When we took the decision to reintroduce the operation of Kusile Unit 5 under the new build ago, I decided to join Eskom because I could not incentive scheme, we did so with the view that the programme further strengthened our generation sit back knowing that I had the skills to contribute performance gains from motivated employees would portfolio and contributed to the easing of supply meaningfully to Eskom’s turnaround. One of my far outweigh the cost of these incentives. That has constraints. 30 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Chief Executive’s review continued TACKLING THE CHALLENGES AND mindful that around 50% of the costs that are over R3 billion in emission abatement projects, with GRID MODERNISATION AND TECHNOLOGY OPPORTUNITIES AHEAD included in the tariff are externally decided for an additional R15 billion allocated over the next five The transformation of South Africa’s electricity Even though we have made measurable progress in Eskom and therefore beyond management’s control. years. Currently, regulatory limits for both SOx and supply industry demands a modern, flexible and many areas, several significant challenges remain on These include depreciation of our assets based on NOx are being met, but stringent requirements from digitally enabled power system. Cyber-security the path to long-term sustainability. the NERSA formula, Government’s IPP programme, 2030 onwards present a risk. We are working on how threats, outdated legacy systems with control which requires us to pass through to customers their to best address those risks. weaknesses and the need for predictive analytics FINANCIAL SUSTAINABILITY, TARIFF REFORMS costs, the environmental levy and carbon tax, and and data management are being addressed through AND MUNICIPAL DEBT the arrear debt from municipalities and metros, as The transition from coal dependency to a lower- comprehensive digital transformation initiatives. Long-term financial sustainability is at risk due to well as court review outcomes on previous NERSA carbon and climate-resilient company is being previously constrained tariff increases, escalating decisions. That means there are only so many places advanced through the Just Energy Transition strategy, We are accelerating investment in infrastructure, municipal arrear debt, and the need for accelerated we can find those efficiencies, but we resolve to supported by strategic partnerships, blended finance smart technologies and digitalisation across the value infrastructure investment. NERSA’s MYPD 6 revenue keep looking. models and public-private collaboration. chain, by implementing advanced digital solutions to determination has resulted in a revenue shortfall enhance operational efficiency and governance. More Our financial strategy has focused on deleveraging Our focus now is on sustaining the operational than R100 billion has been allocated to strengthen and against our application of around R250 billion over the balance sheet, enhancing revenue, driving savings turnaround towards longer-term reliability. The revised expand the transmission and distribution networks the next three years, which will impact liquidity and efficiencies, and addressing the municipal debt Generation Operational Reliability and Sustainability over the next five years, thereby improving system and our ability to invest in sustaining and expanding challenge. The path to investment grade status, Plan aspires to an EAF trajectory of 66% by the end reliability, unlocking grid capacity and enabling our infrastructure. The settlement with NERSA to supported by positive credit rating outcomes, is of FY2026, 68% by FY2027 and 70% from FY2028 renewable energy integration. The accelerated rollout correct their error will assist in lessening the impact, now within reach, and Eskom is well-positioned to onwards. These targets are supported by the closure of microgrids and smart meters to customers will although we are sensitive to how these balances will return to the market for funding within the next of enabling actions identified in external reviews support demand flexibility, improve revenue collection, be recovered through future tariff increases. The two years to support infrastructure expansion and coupled with the continued implementation of the reduce energy losses and enhance customer-centric liquidity reserves we have built up due to our positive maintenance. Calib will discuss this in more detail in Energy Action Plan in collaboration with NECOM. services. The clean energy pipeline, to be driven by financial performance in FY2025 will further support investments to strengthen our asset base and to fund the CFO’s report. If we are to sustain the operational Eskom Green, includes at least 2GW of projects ready our long-term decommissioning obligations. improvements of the past year and build a strong for execution in the short to medium term, with a investment case supported by better credit ratings, longer-term pipeline of 5.9GW encompassing solar PV, We have heard the calls of South Africans, that double- we must keep investing in our plant, so that we can wind, battery storage and gas-to-power projects. digit electricity price increases are unaffordable, that keep the positive spiral going. households are finding it difficult to stay afloat and that companies are struggling to remain competitive, or The biggest obstacle to that positive spiral is the even survive. The Minister has committed to revisiting municipal arrear debt challenge, which continues to the Electricity Pricing Policy through a consensus-led compromise operational plans, the legal separation approach on a long-term tariff outlook that balances of the Distribution Division to NEDCSA, and access affordability with Eskom’s financial sustainability. We are to funding for the Eskom of the future. We are ready to engage on these reforms as they are critical to pursuing innovative solutions, such as the distribution providing a clear forward regulatory path. Any approach agency agreement framework, to improve revenue simply must broaden the reach of the free basic collection, but broader political intervention is electricity allowance to protect South Africa’s poorest needed to reverse this increasingly alarming trend. households: although around 10 million households are eligible for the allowance, only around two million OPERATIONAL EXCELLENCE AND households currently receive it. ENVIRONMENTAL COMPLIANCE Operational sustainability requires ongoing Going forward, we will be managing our costs investment in plant performance, outage execution within single-digit tariff increases by reviewing and and environmental compliance. Poor environmental restructuring our costs and finding efficiencies to performance and non-compliance with regulations bridge the gap to the revenue allowed by NERSA. constitute risks to supply, and we are implementing We have it within our control to be efficient, and targeted emission reduction initiatives, water we need to keep driving that through our high- efficiency plans and ash beneficiation projects to performance culture. Nevertheless, we must be address these challenges. To date, we have spent 31 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Chief Executive’s review continued In March 2025, we marked 10 years since Eskom’s In this context, we simply cannot overstate the on the remaining customers, particularly the most The delivery of our strategy demonstrates that Eskom 100MW Sere Wind Farm achieved full commercial importance of base-load power. It is at the very heart of vulnerable and low-income customers. To balance is sustainable and investable. We are grateful for the operation, demonstrating our skills in this industry. the transition: industry cannot operate without it, and affordability, we must ensure that the market reforms efforts of all our stakeholders to advance progress Over the past decade, the wind farm has supplied it forms the backbone for renewable energy integration are based on clear rules to ensure that everyone can on our turnaround plan, including the Eskom Board, more than 3.1TWh of clean electricity, equivalent into the grid. As more renewables come online, we compete without fear or favour, and ensure everyone the Minister of Electricity and Energy, NECOM and to the annual consumption of about one million need dispatchable generation to offset their variability receives the true benefits of competition. Alongside Government, for the collaborative effort to address households. The site has achieved almost 93% and maintain grid stability. With the contribution of coal other stakeholders, we are actively engaged in the country’s electricity challenges. availability during this time, preventing approximately set to decline, options include long-duration battery developing these rules under the process that NERSA 2.79 million tons of CO2 emissions. storage, pumped hydro or gas. At this stage, gas is the has initiated and is fast-tracking. We are keenly aware that the country depends fastest and most economical solution. on Eskom to continue to deliver on our plans with Our approach to decarbonisation is pragmatic and Despite these challenges, we remain deeply urgency and efficiency, because the economy relies phased. Four older coal-fired stations that would To remain competitive and sustainable, Eskom’s committed to achieving the national objectives and on us, and it will continue to do so even in a reformed previously have had to shut down – Camden, strategy includes the diversification of revenue strategic intent of the unbundling programme. industry. As such, we cannot let our collective Hendrina, Grootvlei and Arnot – will now continue streams to new products and services to reduce our focus slip. We will continue to focus on recovering operating until FY2030 to support energy security, reliance on regulated electricity price increases. Our CREATING A FUTURE-READY ESKOM generation performance to levels expected by our while we accelerate the development of clean energy Research, Testing and Development Department is Although Eskom has faced many challenges and we stakeholders to continue easing supply constraints. capacity and alternative economic opportunities focused on identifying technologies and processes are still navigating a complex operating environment, We will also keep strengthening governance, internal for affected communities through repowering and to move from high-carbon to low-carbon energy we recognise that our people are at the core of controls and consequence management, as well as repurposing projects. sources that will enable Eskom to become as efficient driving sustainable growth and maintaining an combatting crime, fraud and corruption. as possible while sustaining a competitive and organisation that is attractive to future investors. STRATEGIC TRANSFORMATION: sustainable economy. We are fostering a culture of operational excellence While we are sustaining our recovery from the UNBUNDLING AND MARKET REFORMS grounded in skilled people, robust systems and energy crisis and aiming to deliver on our promise The transformation of Eskom and the broader Our strategic objectives are supported by strong aligned processes to the ultimate benefit of our of a loadshedding-free 2025/26 summer period, electricity industry is well underway. The governance, stakeholder engagement, digital country. To achieve operational excellence and we’re also future-proofing the organisation to enable operationalisation of NTCSA (National Transmission transformation and strategic partnerships, among prepare for a competitive future, we remain energy security and affordability, growth and long- Company South Africa) in July 2024 marked a others. Many of the initiatives we are working on committed to transparency, accountability and term sustainability for the benefit of South Africa and critical milestone in the liberalisation of South require policy changes, so we cannot do this without collaboration. sub-Saharan Africa. Africa’s electricity supply industry, with NTCSA now the Government, and particularly the ministries with responsible for grid expansion, market operation and oversight over Eskom’s operations, which have been The journey ahead will require continued focus, When we all work together, we will continue to regional trading. This development lays the foundation incredibly supportive on this journey. agility and support from key stakeholders. We must power South Africa’s growth and drive economic for competitive market reforms and grid expansion. remain vigilant to the risks that could jeopardise development, and in so doing, create a legacy of The establishment of the National Electricity Eskom is a skills-based engineering organisation, and delivery, and we must embrace the opportunities reliability, sustainability and excellence. Remember, Distribution Company of South Africa (NEDCSA) is what drives us is delivering certainty. While we focus presented by a transforming energy sector. Our if it is to be, it is up to us! fundamentally linked to resolving the municipal debt on delivering certainty in the provision of electricity, strategy is ambitious but grounded in the realities of challenge, which remains a key priority. both now and into the future, we are also focused our operating environment, and as such, is very much on obtaining certainty in the policy environment so achievable, as we have demonstrated this past year. The establishment of Eskom Green, a wholly owned that Eskom, with all other players, can deliver the Our commitment to sustainability, stakeholder trust renewable energy subsidiary, will accelerate our benefits of competition that the Electricity Regulation and ethical leadership will guide us as we build the participation in renewables, thereby positioning Amendment Act now provides for. Eskom of the future. Dan Marokane Eskom as a leader in South Africa’s energy transition Group Chief Executive and supporting our commitment to net-zero We agree that industry reforms are vital, but we Eskom now stands at the threshold of a new emissions by 2050. Ultimately, pursuing a large-scale require clarity on the rules regarding trading licences, era. The progress we have made in operational renewables rollout in conjunction with the continued market codes and grid access. Having no rules in place recovery, financial turnaround, governance matters operation of our existing generation plant represents would allow an unregulated industry to develop, and and strategic transformation is a testament to the the most cost-effective solution to delivering new who would want to invest in that? The rule of law resilience, competency and dedication of our people. generating capacity while maintaining base-load would be weakened, and that should not be tolerated. We have demonstrated that, even in the face of power and grid stability. Furthermore, if a group of contributing customers is adversity, Eskom can adapt, innovate and deliver removed from the base, it is bound to exert pressure results that define the future of South Africa. 32 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Chief Financial Officer’s commentary initiatives have not yet reduced Eskom’s risk exposure REFLECTING ON THE MARKEDLY IMPROVED Eskom achieved a profit before tax of R23.9 billion sufficiently. To accelerate progress, Exco initiated a FY2025 FINANCIAL RESULTS (2024: loss of R25.5 billion) – the first return to three-year audit recovery programme following the Last year, I indicated that we’d reached a turning profitability since FY2017. This was underpinned by conclusion of the FY2024 audit in December 2024. point and that we had laid the foundation for Eskom’s a stronger EBITDA margin of 29.05% (2024: 14.67%), Its objective is to restore the integrity of Eskom’s future success. As Dan discussed in the GCE’s supported by a 12.74% standard tariff increase and control environment, address recurring audit findings review, Eskom’s positive spiral was premised on disciplined cost containment, particularly in primary and improve audit readiness to ultimately support collectively recovering both operational and financial energy costs. Improved plant reliability and the unqualified audit outcomes and the publication of performance. In that regard, FY2025 represents a easing of generation supply constraints contributed Eskom’s annual results within legislative timeframes. pivotal moment in Eskom’s journey. Following years to a 3.5% growth in sales volumes and reduced of constrained performance, we are beginning to reliance on expensive OCGTs, with year-on-year The programme focuses on reinforcing governance see the tangible benefits of our recovery strategies, OCGT fuel savings of R16.3 billion. The recovery structures, fostering a culture of accountability, with marked improvements across key financial of R9.2 billion relating to previously disallowed fuel improving documentation management and metrics driven by the operational turnaround and levy rebates from SARS provided a further boost to recordkeeping, and enhancing compliance with Government support. earnings and liquidity. existing controls across key processes. Strengthening management oversight and implementing effective consequence management remain central to our recovery efforts. We are also investing in systems Major contributors to the improvement in profitability, R billion DRIVING IMPROVED AUDIT OUTCOMES and digitilisation, while enhancing specialist skills 23.5 The audit for the year ended 31 March 2025 reflects and capacity across finance, assurance and other (1.6) 5.3 our progress in preparing for and concluding the oversight functions. audit process more timeously, although the latest To ensure executive-level accountability, the audit outcome continues to highlight key long-term (8.1) programme is overseen by the Exco Audit governance challenges. Deloitte issued a qualified 23.9 Recovery Oversight Committee, chaired by the audit opinion, related only to the quantification (13.1) GCE. The programme has already demonstrated 45.1 (1.9) and disclosure of PFMA-related information that its effectiveness in driving corrective action. Nearly formed the basis for their qualified opinion, also 90% of external audit findings raised since FY2021 highlighting internal control deficiencies. Except for have been closed, subject to audit verification. We this qualification, Eskom’s financial statements are are satisfied with the progress, considering that the considered to be fairly presented in terms of IFRS programme was initiated with only three months Accounting Standards. remaining until the end of FY2025, given the late The Audit Committee, under the leadership of conclusion of the FY2024 audit. Fathima Gany, noted continued weaknesses in We remain committed to enhancing the control financial reporting, supply chain management, environment and ensuring robust, transparent and contract governance and compliance with legal and compliant financial reporting processes. Financial regulatory requirements. The breakdown in controls integrity begins with each of us and requires disciplined (25.5) 15% 14% 6% 23% 14% 494% at component level and poor adherence to well- execution and diligent oversight at all levels. The established policies and procedures have necessitated Loss Revenue Primary Repairs Employee Net Net fair Other Profit audit recovery programme creates a shared mandate before energy and benefit cost finance cost value losses before greater reliance on external assurance providers. that requires visible leadership and full organisational tax (2024) maintenance tax (2025) We recognise that the control environment does commitment. As part of the programme, we have not yet meet the standards required to support an onboarded additional finance resources to rebuild (Loss)/profit before tax YOY cost reduction YOY cost growth YOY income growth unqualified audit outcome nor the expectations of capacity in key areas of the business. our stakeholders. Despite management’s concerted efforts to address the deficiencies identified, these  efer to the “Condensed annual financial statements” from page 84 for commentary on key movements IR R 33 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Chief Financial Officer's commentary continued DELIVERING ON OUR FINANCE STRATEGY RESOLVING THE TARIFF We are pleased that the review of NERSA’s RCA Our finance strategy is built on four interdependent pillars, with operations at the centre. Each pillar plays an The 12.74% tariff increase for FY2025 has supported decisions from FY2015 to FY2021 have also been integral role in supporting Eskom’s financial sustainability. our financial recovery by migrating the tariff path to resolved, with the finalisation of a R40.2 billion more appropriate levels. NERSA also approved our settlement in Eskom’s favour in May 2025. Recovery proposal for the restructuring of tariffs, with phased of this amount, along with the remaining R19 billion implementation from FY2026. These changes were from the MYPD 6 settlement, is yet to be determined  REVENUE SECURITY AND BALANCE SHEET  intended to support the user-pays principle and fair cost recovery and represent the first step in addressing the structural inadequacy of the tariff path. but is only expected from FY2029 at the earliest. We also await NERSA’s decisions on the recovery of RCA awards totalling R7.7 billion for FY2021 to ENHANCEMENT OPTIMISATION FY2023, which is similarly expected from FY2029 However, further progress is required as Eskom’s at the earliest. When negotiating settlements of this Adequate tariff path R230 billion debt relief fixed costs are being recovered largely on a variable nature, we are particularly sensitive to how recovery Tariff restructuring Dispose non-core assets basis, which is unsustainable. Tariff structures Improve income statement of the amounts will be phased, balancing customer New products and services Diversify funding mix must be modernised to accurately reflect the true Strengthen balance sheet affordability with Eskom’s financial sustainability. component costs and fixed or variable nature of generation, transmission and distribution activities to Regulatory uncertainty and the absence of a long- Operations provide appropriate market signals and support the term tariff trajectory continue to impede strategic  COST EFFICIENCIES MUNICIPAL DEBT  restructuring of the electricity supply industry into a rules-based competitive market. planning for the electricity supply industry, our customers and investors. We require predictability to foster investment into South Africa. With the Review cost trajectories and REDUCTION The migration towards a more appropriate tariff path support of the Minister of Electricity and Energy, we drive efficiencies Address poor current that balances customer affordability with Eskom’s will engage with NERSA and other stakeholders on Enhance financial controls account payment levels financial sustainability is a key priority to ensure the establishing a predictable long-term tariff outlook. sustainability of the industry. This is necessary to Root out crime, fraud and Pursue alternative solutions support the competitiveness of energy intensive users DRIVING EFFICIENCIES corruption Enforce legal rights and safeguard vulnerable sectors. An inadequate tariff We remain mindful of the economic pressures our path has been a significant contributor to Eskom’s customers are facing. We, too, feel the pressure of financial constraints over the past two decades. We rising costs on our operations. Eskom is pursuing have not been allowed sufficient revenue to cover the initiatives to reduce its cost base through operational prudent and efficient costs that we incur, nor to earn efficiencies and to diversify revenue streams that will a return on assets to cover our cost of capital. reduce our reliance on regulatory tariff increases. DELEVERAGING THE BALANCE SHEET decreased to R372.7 billion (2024: R412.2 billion), Government’s debt relief programme continues and net debt (including the shareholder loan) fell Once again, NERSA’s MYPD 6 determination Savings for the year were driven primarily by coal to assist Eskom in meeting its debt servicing to R358.7 billion (2024: R401.1 billion). These fell short of the legally mandated requirements optimisation and reduced OCGT usage, partially requirements. By year end, R140 billion in support improvements have translated into stronger supporting our application. Based on NERSA’s offset by energy losses due to electricity theft and had been received since the implementation of the solvency ratios and credit metrics. incorrect application of the MYPD methodology, we higher spend on employee benefits and maintenance. Eskom Debt Relief Act. Of that, R64 billion was made took the decision on legal review. These rules are in available in FY2025. The amounts received are initially We are acutely aware of the detrimental impact of place to protect both Eskom and its customers. The Cost Optimisation and Revenue Enhancement recognised as shareholder loans and only converted to Government’s support to Eskom on the national (CORE) programme, overseen by our newly equity based on National Treasury’s assessment of our fiscus. Recent amendments to the debt relief package NERSA has been very responsible about addressing established Strategic Delivery Unit, is targeting compliance with the debt relief conditions. An amount have streamlined both the timing and structure of the errors it made in its determination. We agreed cumulative efficiencies of over R50 billion by FY2029 of R8 billion was converted to equity by year end. future support and reduced the fiscal burden from to a settlement of R54 billion, with R12 billion to through revenue growth, procurement efficiencies, R254 billion to R230 billion because of Eskom’s be recovered in FY2027 and R23 billion in FY2028. primary energy optimisation, digital transformation The convertible shareholder loan balance increased improved financial position. We expect to receive After adjusting for the settlement, the tariff path now and capital productivity. to R56.1 billion (2024: R32 billion), which has been R80 billion in FY2026 and the final R10 billion in includes an estimated increase of 8.76% for FY2027 approved for conversion to equity subsequent to FY2029, to assist with bond redemptions. and 8.83% for FY2028, while the increase for FY2026 year end. Gross debt securities and borrowings remains at 12.74%. 34 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Chief Financial Officer's commentary continued Eskom is fundamentally overhauling the way it We are engaging with Government to explore Our decarbonisation objectives aim to deliver on Over the next five years, we will invest approximately manages costs by changing the way it does business alternative interventions, including prepaid supply cleaner coal technologies and a pipeline of clean R320 billion in sustaining and expanding our and ensuring it sustains those efficiencies moving models as well as Eskom’s proactive intervention energy capacity to support South Africa’s climate infrastructure. Around 40% is earmarked to support ahead. Procurement processes are being modernised of implementing distribution agency agreements to commitments while maintaining energy security. generation capacity, including the clean energy through the introduction of digital systems such as capacitate municipalities and improve both revenue We will actively participate and compete in the pipeline, with a further 40% allocated towards the e-tendering, price verification tools, digital stock collection and service delivery. We are employing renewables market, through the establishment of Transmission Development Plan. The remainder control and e-auction systems to improve spend a partnership approach, working closely with Eskom Green, and pursue opportunities to diversify is set aside for distribution network strengthening control and monitoring. We are also engaging with municipalities that are willing to collaborate. into new products and services to grow non- and refurbishment, accelerating the rollout of smart suppliers on the need to intensify cost control and regulated revenue streams. Eskom is well-positioned meters, and other support services. manage within NERSA’s allowable tariff increases Government is committed to resolving the municipal to continue to support South Africa’s energy and have implemented standardised rates through arrear debt challenge. Key to this is the finalisation transition and economic development agenda. Even though the conditions associated with benchmarking to ensure that services are procured of a national framework for distribution agency Government’s debt relief remain in effect until at competitive market rates. agreements, to be tabled at Cabinet, as well as The progress made in stabilising Eskom’s financial FY2029, we may access external funding with driving reform across the electricity distribution position, improving liquidity and enhancing approval from the Minister of Finance, provided it To ensure that savings are both achievable and industry through inter-governmental platforms. operational performance during FY2025 has is undertaken at a pace that our balance sheet can sustainable, the Strategic Delivery Unit is monitoring These measures are essential to curbing the growth reinforced our ability to deliver on our mandate and support. That means being in a position where we the implementation of initiatives to drive efficiencies of municipal debt, improving revenue collection and reduce our burden on the fiscus. These outcomes can settle our debt obligations on maturity without and unlock value through disciplined execution. safeguarding Eskom’s financial position. have been achieved despite structural constraints Government support. Therefore, we’ll have to rely in the tariff path and the persistent challenge of primarily on surplus operating cash flows to fund ADDRESSING REVENUE COLLECTION STRENGTHENING ESKOM’S INVESTMENT escalating municipal arrear debt, both of which capital expenditure, at least for existing assets, to CHALLENGES CASE are critical to unlocking the full potential of our continue our efforts to deleverage the balance sheet. Municipalities and metros constitute our largest Eskom’s investment case is anchored in its strategic investment case. customer segment, representing 42% of our role as the backbone of South Africa’s electricity Eskom’s borrowing programme will remain sales. Proactively addressing poor payment levels supply industry. Looking ahead, the structural reforms OPTIMISING LIQUIDITY AND ENABLING conservative over the next two years, limited to and curbing escalating arrear amounts owed by underway will strengthen our investment case, better INFRASTRUCTURE INVESTMENT drawdowns from existing facilities. Thereafter, we municipalities is therefore critical to resolving positioning us to respond to the positive shifts across Eskom’s liquidity has strengthened significantly intend returning to the capital markets to fund Eskom’s revenue challenges. Municipal arrear debt the investment landscape – these necessitate a broader through the results of our turnaround strategy, expansionary requirements from FY2028, targeting up stood at R94.6 billion at 31 March 2025, an increase focus on ESG impacts beyond financial returns. supported by improved operating cash flows, to R25 billion per year if required. We plan to source of 27% from the prior year (2024: R74.4 billion). the recovery of fuel levy rebates from SARS and this funding partly through sustainability-linked bonds. Unfortunately, despite the implementation of The legal separation process will deliver rationalised Government’s debt relief programme. Stabilising National Treasury’s municipal debt relief programme, businesses with clearer cost structures, improved our liquidity position and holding the necessary To support Eskom’s standalone financial sustainability, the growth has not slowed, as most of the transparency and strategic alignment across the value reserves are essential for providing the financial we aim to reduce the gross debt balance toward a participating municipalities are failing to pay their chain to facilitate a competitive industry. This will headroom for improved planning and execution, more sustainable level of no more than R300 billion, current accounts on time. be supported by a revised subsidiary governance enabling investment in infrastructure for maintenance and to improve the gross debt/EBITDA ratio to framework and an active performance management and expansion, emission reduction and grid approximately 3 over the medium term. Despite our best efforts at implementing the legal parenting strategy. reliability. These investments are critical to support and credit control remedies available to us, we have sustainable operational performance, enable the not seen the improvements we require. The fact is As the industry transitions toward a rules-based energy transition and ensure security of supply. that this is a systemic challenge which requires an competitive market, Eskom is uniquely positioned Sufficient liquidity is also required to meet regulatory inter-governmental approach. Unless we can find a as an established market player with a skilled and requirements for the funding of our long-term sustainable solution to this issue, municipal arrear debt diversified workforce, substantial market share and decommissioning obligations. is estimated to grow to over R300 billion by FY2030. critical base-load capacity. Furthermore, Eskom’s Simply put, we cannot carry the financial burden posed capital programmes offer a diversified portfolio of by municipalities any longer, without placing Eskom’s investments across generation, transmission and broader financial sustainability and operations at distribution infrastructure which will facilitate private serious risk. The situation also jeopardises the viability sector participation. of Eskom’s standalone Distribution company and the broader legal separation process. 35 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Chief Financial Officer's commentary continued CHARTING THE PATH TO STANDALONE INVESTMENT GRADE STATUS FINAL THOUGHTS public institutions. As Eskom stabilises, it creates the Credit rating agencies have responded positively to our progress, with several rating upgrades and improved FY2025 stands as a testament to Eskom’s resilience conditions necessary for inclusive growth, job creation outlooks from S&P, Moody’s and Fitch. These actions demonstrate growing confidence in our strategy and and commitment to recovery. As indicated in and a more resilient energy sector which underpins recovery efforts. Despite this, Eskom’s ratings remain at sub-investment grade level, with standalone ratings the GCE’s review, the return to profitability and national development. around two notches below long-term secured ratings. improved liquidity are not only critical milestones for Our progress in turning around operational and the organisation – they represent a broader benefit financial performance, supported by Government Sub-investment grade credit ratings Investment grade credit ratings to South Africa’s fiscal and economic landscape. and stakeholder collaboration, has positioned Eskom In default/default Extremely Substantial Highly Speculative Lower Medium Higher Prime Improved financial performance reduces reliance on for a sustainable future. Our results for FY2025 are imminent speculative risk speculative grade grade grade Government support, enhances Eskom’s ability to not a once-off achievement, but rather the new Eskom (secured) invest in critical infrastructure and energy security and baseline to sustain and build upon as we shift our Eskom contributes to restoring confidence in South Africa’s focus to the future. (standalone) EBITDA FY2026 outlook R85 billion–R95 billion 3 to 5 years (2025: R99 billion) Sales volumes Tariff increase Revenue Debt service cover ratio D C CC CCC-to B- to BB-to BBB-to A-to AA-to AAA 2–3% lower 12.74% 5–10% higher 2.00–2.50 CCC+ B+ BB+ BBB+ A+ AA+ (2025: 1.11) Operating Primary Debt servicing Gross debt/EBITDA ratio Achieving standalone investment grade status and I believe the path to investment grade status is within expenditure energy costs requirements 5.00–5.50 unlocking broader access to capital markets require reach, contingent on continued financial discipline 5–10% higher 5–15% higher 30–40% lower (2025: 4.90) sustained improvement in our operational and and sustaining and building upon the success of our Arrear municipal debt financial performance. From a financial perspective, turnaround strategy. Progress will not be achieved this means growing our earnings, demonstrating overnight and will require disciplined execution over R120 billion–R135 billion (2025: R94.6 billion) reliable cash flows and achieving a healthy liquidity the longer term. Our creditworthiness will continue position over several years. Rating agencies also to benefit from Government’s support over the assess the diversity and sustainability of Eskom’s remainder of the debt relief period. However, to revenue streams as well as our ability to manage achieve financial sustainability and strengthen Eskom’s debt levels effectively, looking for strong profitability, investment case, we must achieve investment grade Eskom remains a strategic asset to the country, with When I took on the role of GCFO, I did so with solvency and liquidity ratios. status on a standalone basis without further support an investment case built on a credible roadmap to a personal goal of delivering two things: returning or government guarantees. We expect to walk this sustainability, a strengthened governance framework Eskom to profitability, and once again paying bonuses Market conditions and the broader industry landscape path over the next three to five years as industry and a commitment to transparency and accountability. to our people to reward them for their tireless also play a role. Improved investor sentiment, reforms begin to take shape. We are well-positioned to attract capital to support efforts. With these goals achieved, my focus now tangible support from Government in addressing infrastructure development, thereby playing a leading shifts to strengthening Eskom’s investment case and our municipal debt challenges, regulatory certainty role in shaping the competitive and resilient electricity supporting the path towards standalone investment and an adequate, long-term tariff path are key to supply industry of the future. grade status, without the need to rely on the fiscus. future rating upgrades. Furthermore, rating agencies have acknowledged the strong link between Eskom’s I extend my gratitude to the Chairman, the Board credit ratings and those of South Africa. When Eskom and its committees, Exco and all employees for succeeds, so does South Africa – through sustained their unwavering dedication. Together, we are laying economic growth and job creation. the foundation for Eskom’s long-term success. Our Calib Cassim commitment to financial discipline and operational Group Chief Financial Officer excellence is critical as we continue to build a sustainable and investable Eskom. 36 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Our strategic and risk landscape Reflecting on our operating context 38 Repositioning Eskom for sustainability in a transforming industry 42 Mitigating risk and maintaining resilience 46 37 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Reflecting on our operating context The past year marked a pivotal period for Eskom, GLOBAL AND REGIONAL DIGITALISATION AFRICAN ENERGY OUTLOOK shaped by a dynamic and evolving operating CONSIDERATIONS Digital transformation is reshaping the energy Africa’s energy landscape is undergoing a profound environment. Globally, the energy sector continued GLOBAL CONTEXT sector. Technologies such as artificial intelligence (AI) transformation, driven by the dual imperatives of its transition toward decarbonisation, digitalisation, The global energy landscape continues to be shaped and predictive analytics are enabling smarter grid expanding access to electricity to facilitate growth decentralisation and democratisation, while by the four Ds – decarbonisation, digitalisation, management, operational efficiencies and improved and development, and transitioning to cleaner geopolitical shifts and climate finance realignments decentralisation and democratisation – which are forecasting. The global digital transformation market is energy sources. The continent’s vast renewable introduced new uncertainties. Domestically, the redefining how utilities will operate, invest and engage projected to grow at almost 25% annually until 2030. energy potential, coupled with growing demand and formation of South Africa’s Government of National with customers. For utilities, this presents opportunities to reduce international support, positions it as a future global Unity following the May 2024 national elections costs, enhance reliability and improve customer leader in sustainable energy. brought renewed political stability and a unified focus DECARBONISATION service, although it introduces new cyber-security and on energy reform, infrastructure investment and The global shift toward carbon-efficient energy data privacy challenges. Africa is still the region with the lowest electricity economic recovery. sources is accelerating, driven by technological consumption per capita globally. However, demand innovation, declining costs of renewables and DECENTRALISATION is expected to rise significantly due to population Eskom made significant strides in operational increasingly stringent environmental regulations. Energy systems are becoming more distributed, growth, urbanisation and economic development. recovery, with the Generation Recovery Plan yielding At COP29, countries reaffirmed their commitment to with localised generation – such as rooftop solar and Electricity consumption per capita is projected to a sustained improvement in energy availability and the Paris Agreement, pledging to: microgrids – gaining traction. This shift is driven by more than double by 2050. This growth requires delivering 310 consecutive days without loadshedding regional resource availability, customer demand for large-scale investment in generation capacity, • Expand clean energy infrastructure, including up to 30 January 2025. The implementation of energy independence and the need for grid resilience. grid infrastructure and regional electricity trade 15 terawatts of energy storage the Electricity Regulation Amendment Act and In South Africa, decentralisation is expanding mechanisms. the operationalisation of NTCSA marked critical • Build or refurbish 25 million kilometres of grid generation capacity beyond traditional hubs like milestones in the early stages of the liberalisation of infrastructure by 2030, subject to availability of According to the International Renewable Energy Mpumalanga to provinces such as the Eastern Cape, the electricity supply industry. funding Agency (IRENA), Africa’s renewable energy capacity Western Cape and Northern Cape. • Strengthen climate resilience and financial support is expected to grow from 56GW in 2023 to 310GW Despite these gains, we continue to face financial for vulnerable nations DEMOCRATISATION by 2030. This expansion is supported by declining and structural challenges, including lower-than- The democratisation of energy is empowering technology costs, favourable solar and wind resources, required tariff approvals, escalating municipal Despite these commitments, geopolitical shifts communities and consumers to take part in energy and increasing international investment. South Africa debt and the need to evolve our business model have introduced new uncertainties. In January 2025, generation and decision-making. The rise of is a key beneficiary of this trend, with the European to remain competitive in a transforming market. the United States formally withdrew from the Paris prosumers, independent power producers (IPPs) and Union’s investment package providing a significant The organisation is responding through strategic Agreement as well as the Just Energy Transition community energy projects is leading to increased boost to the country’s JET. partnerships, digital transformation and the Partnership (JETP) with South Africa. This has competition and options available to customers. establishment of a renewable energy company – disrupted global climate finance flows and may delay For Eskom, this trend requires the diversification Interest in nuclear energy is also growing across the Eskom Green – to accelerate our participation in the access to clean energy technologies for developing of revenue streams, the development of dynamic continent. The International Atomic Energy Agency green economy, together with initiatives aimed at economies. However, the European Union’s pricing models and the expansion of service offerings (IAEA) projects that nuclear generating capacity sustainably addressing our financial challenges. €4.7 billion green energy investment pledged to to include renewable energy and self-generation in Africa will increase by almost 60% by 2030 and support South Africa’s transition has helped to solutions. tenfold by 2050 compared to 2022 levels. Gas is still offset this gap, reinforcing international support for a critical transitional fuel, with regional partnerships, decarbonisation. such as that with Sasol, supporting the development of liquefied natural gas (LNG) infrastructure and Renewables are expected to account for over 40% of cross-border supply agreements. global energy production by 2028, with solar PV and wind making up around two-thirds of new generation projects planned globally until 2030. 38 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Reflecting on our operating context continued Despite the continent’s energy potential, South Africa has reaffirmed its commitment to For Eskom, the GNU presents both opportunities TRANSFORMING THE ELECTRICITY infrastructure gaps and policy fragmentation remain reducing greenhouse gas emissions to between and complexities. The renewed political consensus SUPPLY INDUSTRY key barriers. Achieving Africa’s energy goals will 398 to 510Mt CO2e by 2025 and between 350 to provides a more stable policy environment and The South African electricity supply industry (ESI) require: 420Mt CO2e by 2030, in line with the country’s accelerated regulatory reform, which includes is undergoing fundamental transformation, driven • Coordinated industrial and energy strategies net-zero target by 2050. The electricity sector, which finalisation of the Electricity Regulation Amendment by structural reforms, policy innovation and the • Investment in grid modernisation and contributes more than 40% of national emissions, is Act during the past year. It also enhances the urgent need to ensure long-term energy security interconnection central to achieving these targets. likelihood of regulatory continuity and cross- and sustainability. We are both participating in and departmental coordination, which is essential for enabling this transformation, which is reshaping the • Enabling regulatory frameworks to attract private THE COUNTRY’S POLITICAL LANDSCAPE infrastructure rollout and energy sector reform. roles of generators, distributors and consumers. capital and ensure long-term project viability The formation of South Africa’s GNU marked However, the coalition nature of the GNU could For Eskom, these developments present both a significant shift in the country’s political and introduce complexities in decision-making and policy The National Energy Crisis Committee (NECOM), opportunities and challenges. As a regional energy governance landscape. As a multi-party coalition, alignment due to the need for consensus among set up in 2022, continues to coordinate the player, our strategy must align with continental trends, the GNU is guided by a Statement of Intent that diverse political actors. This will require that we implementation of the five pillars of the Energy Action to explore cross-border partnerships and position prioritises inclusive governance, economic recovery, engage proactively and transparently with a broader Plan discussed earlier. Eskom to contribute to – and benefit from – Africa’s energy security and infrastructure development. range of stakeholders. Energy security and reform is a cornerstone of the The Electricity Regulation Amendment Act, which energy transformation. became effective from 1 January 2025, lays the GNU’s agenda, with a strong emphasis on accelerating We have responded by strengthening our the implementation of Government’s Energy Action relationships with key government departments, legislative foundation for a competitive electricity THE SOUTH AFRICAN PERSPECTIVE Plan and the JET Investment Plan. regulators and oversight bodies. This includes active market. It enables: South Africa’s energy landscape is driven by the persistent challenge of balancing the energy participation in policy consultations, alignment with • Establishment of an independent Transmission In his opening address to Parliament in February 2025, policy and oversight ministries, as well as regular System Operator (TSO) trilemma: ensuring energy security, affordability and President Cyril Ramaphosa reaffirmed the GNU’s engagement with the National Treasury on the • Unrestricted access to the grid for all market environmental sustainability. While the country has commitment to the five pillars of Government’s success of debt relief mechanisms essential to participants made progress in stabilising electricity supply and Energy Action Plan: supporting Eskom’s financial sustainability until tariffs advancing the energy transition, significant structural • Development of electricity market rules to facilitate constraints and socio-economic pressures persist. • Fixing Eskom and improving the availability of are allowed to move to appropriate levels. trading among generators, consumers and retailers existing supply THE ENERGY TRILEMMA • Enabling private sector investment in generation by The implementation of Eskom’s Generation removing licensing thresholds Recovery Plan has led to a marked improvement in plant • Accelerating the procurement of new generation performance, with generating plant availability increasing capacity around 6% year-on-year, with 310 consecutive days • Supporting rooftop solar adoption by businesses without loadshedding up to 30 January 2025. These gains and households through introducing tax benefits were supported by the return of 2 400MW of capacity • Transforming the electricity sector by unbundling at Medupi, Kusile and Koeberg following extended Eskom and liberalising the electricity market outages. However, the power system is still vulnerable, and sustained investment in generation and network The GNU has also prioritised the expansion and infrastructure is essential to maintain reliability. strengthening of the national transmission network and the development of a green manufacturing sector Energy affordability is a critical concern, particularly centred on renewable energy, green hydrogen and in the context of rising unemployment, significant electric vehicles. levels of poverty and limited fiscal resources. NERSA approved a tariff increase of 12.74% for FY2026, significantly below the level we applied for. This decision, while sensitive to consumer pressures, adds significant strain on our financial sustainability and our ability to fund necessary infrastructure upgrades to enable reliable performance. 39 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Reflecting on our operating context continued NTCSA has commenced operation as the interim The country’s 2024 draft Gas Master Plan (GMP2024) Eskom’s ability to adapt, collaborate and innovate A key requirement of the Electricity Regulation TSO, buying electricity from Eskom’s Generation outlines the role of gas in the energy mix and while effectively executing our strategy to deliver on Amendment Act is the implementation of a Division, IPPs and cross-border suppliers. NTCSA is addresses inland and coastal supply challenges. our mandate will decide our continued relevance and competitive wholesale electricity market, which also responsible for developing the wholesale electricity It supports policies like the Gas IPP Procurement contribution to South Africa’s energy future. includes the application to NERSA for a market market, which is expected to increase competition, Programme, targeting 2GW of new generation operator licence, drafting a market code which will transparency and efficiency in the industry. capacity from land-based gas-fired power facilities. PROGRESS ON SEPARATING THE be subject to consultation prior to approval, and Strategic partnerships, such as those with Sasol, TRANSMISSION BUSINESS establishing a trading platform. It is not envisaged that support the development of LNG infrastructure and NTCSA was established to house the transmission the competitive wholesale electricity market will be IR Refer to “Eskom’s position – Adapting our business regional gas supply agreements. business. Its operationalisation was delayed operational until after FY2026. model for sustainability through unbundling” below beyond the timelines originally anticipated in for further information Several new laws are reshaping the energy and Government’s Roadmap due to key policy and The Market Operator has been established within infrastructure landscape: regulatory dependencies. By 31 March 2024, the Energy Market Services business unit of NTCSA, The Transmission Development Plan 2024 (TDP), • The Climate Change Act, 2024 introduces the conditions for the merger and subscription and a draft market code was developed and published published by NTCSA, highlighted the need for around mandatory carbon budgets and progressive agreements had all been met. NTCSA commenced for stakeholder comment. Since then, the Market 14 500km of new transmission lines by 2034. NTCSA emissions targets trading on 1 July 2024, following the transfer of Operator has conducted numerous workshops is accelerating the build rate and implementing • The Public Procurement Act, 2024 promotes people and systems from our Transmission Division. to engage on the market code with industry innovative solutions such as: sustainable development, localisation and economic This marked its formal establishment as a wholly stakeholders: government departments, Eskom, • Revised grid allocation rules adopting the transformation owned subsidiary of Eskom and a key milestone municipalities, consumers, IPPs and traders, among “first ready, first served” principle in Government’s Roadmap to transform the others. The required legal due diligence on the market • The Expropriation Act, 2024 enables the state to • Curtailment frameworks to unlock capacity in electricity supply industry. The lessons learnt from code was completed and subsequent revisions to the acquire land for public use, thereby speeding up constrained areas the Transmission separation are being incorporated code have been concluded, incorporating comments servitude acquisition for transmission projects into the remainder of the separation process. from stakeholders. A second round of stakeholder • Accreditation of international transformer suppliers Together, these developments signal a decisive comments have been requested, and the draft code to speed up delivery of transformer capacity NTCSA’s operationalisation presents a pivotal step shift toward a liberalised, investment-friendly and will be submitted to NERSA for approval once all The draft Integrated Resourced Plan 2023 sustainable electricity sector. Eskom’s ability to adapt in enabling a competitive electricity market and required processes have been finalised. (IRP) outlines a dual-horizon approach to meet to this evolving landscape will be critical to ensure the positioning South Africa as a regional energy hub, with NTCSA now responsible for grid expansion, market NTCSA’s governance structures approved the South Africa’s energy needs: organisation’s continued relevance and sustainability. operation and regional trading. market operator licence application which was • Short-term to 2030: Addressing generation duly submitted to NERSA in May 2025. NERSA capacity constraints and ensuring a balance ESKOM’S POSITION The legal separation will facilitate the creation of an rejected the application in July 2025 as it was between supply and demand ADAPTING OUR BUSINESS MODEL FOR independent TSO, which will enable investment in deemed inadequate and requested, among other • Long-term until 2050: Building a resilient, net-zero SUSTAINABILITY THROUGH UNBUNDLING generation by IPPs and reduce the risks of a single requirements, the simultaneous submission of the electricity sector Strategically, we are adapting to the liberalisation of entity managing most of the country’s electricity market code. Engagement with NERSA confirmed the electricity market. The unbundling of our vertically supply. In August 2024, Parliament passed an that simultaneous submission of the market code was The draft IRP prioritises solar PV and wind as the integrated structure is progressing, albeit with delays amendment to the Electricity Regulation Act, 2006 not required. The application was resubmitted by dominant new generation sources, with limited due to legal and financial complexities. As the industry to support Eskom’s unbundling and the creation of an the end of July 2025 with additional information. The inclusion of hydro and nuclear before 2030 due to the evolves, we must transform our business model to independent electricity market. While the final market licence application has been advertised, and hearings long lead times associated with these technologies. remain competitive and sustainable, while committing structure is being determined, NTCSA is fulfilling the are expected to take place from September 2025. We have aligned our long-term planning outlook with to operational excellence, financial discipline and role of TSO on an interim basis, from the effective the draft IRP and updating our strategy accordingly. stakeholder trust. Many new business opportunities date of 1 January 2025 of the Electricity Regulation are presented by clean energy generation, grid Amendment Act, 2024, until the ultimate TSO is expansion, a wholesale energy market, smarter established. trading platforms and customer-centric solutions that deliver new and enhanced products and services through predictive analytics and smart grid technologies. 40 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Reflecting on our operating context continued PROGRESS ON SEPARATING THE The next steps of the programme are the legal Utilising a separate subsidiary to focus on renewable Financially, Eskom continued to face challenges DISTRIBUTION BUSINESS separation of the distribution business, followed energy has several advantages: despite Government’s debt relief support towards The National Electricity Distribution Company of by the establishment of a new holding company, • Dedicated management focus debt servicing obligations, with tariff increases that South Africa SOC Ltd (NEDCSA) was registered to leaving the generation business in the current Eskom • Innovative mindset founded on agility and flexibility fell short of our requirements. Municipal arrear debt house the distribution business. Its separation has company. This will culminate in the formation of three to respond to rapid market changes and electricity theft continued to erode revenue, been similarly delayed by external dependencies, separate subsidiaries under a new Eskom holding with the municipal debt relief programme introduced • Lean, simplified business model to drive cost including the delays which affected the NTCSA company as envisaged in Government’s Roadmap. by National Treasury not delivering the expected efficiencies and competitiveness separation. The complexity and magnitude of the improvement in payment levels of non-performing Engagements with the shareholder, NERSA and • Alternative funding options, including special municipalities. Cost containment remains central to municipal arrear debt challenge, which affects key forums such as NECOM to define the industry investment vehicles our financial strategy. NEDCSA’s financial sustainability as well as that of the group as a whole, is impacting NEDCSA’s lender reform and address key concerns from the market • Increased attractiveness to investors from an ESG engagement process. The Distribution management are ongoing. perspective, with no exposure to traditional assets Our sustainability agenda focused on enhancing board has recommended that the matter be escalated • Increased transparency of financial and ESG environmental compliance and climate resilience. ESTABLISHING A SEPARATE VEHICLE TO reporting Exemptions from Minimum Emission Standards to intergovernmental structures and factored into PARTICIPATE IN RENEWABLE ENERGY were granted under strict conditions, while the new revised project timelines. We intend to accelerate participation in renewables DRIVING IMPROVED PERFORMANCE Climate Change Act requires carbon budgeting Organised labour has declared two disputes relating through the establishment of a wholly owned During the past year, we entered a phase of and clean energy investments. The repowering and to the separation of NTCSA and the intended renewable energy company, provisionally titled Eskom stabilisation and progress, marked by operational repurposing of coal-fired stations underscores our separation of NEDCSA, creating challenges in the Green, which will drive the development of multiple improvements and strategic reforms across the value commitment to a just energy transition, while the consultation process until the arbitration is concluded. clean energy projects as part of its portfolio. This chain. The Generation Recovery Plan significantly proposed launch of Eskom Green marks a pivotal This could cause further delays to the timelines. ambition is supported by a pipeline of clean energy enhanced generating plant performance through step in our transition strategy, enabling focused projects aimed at adding at least 2GW capacity by improved maintenance, returning capacity from participation in the renewables market, to expand PROGRESS ON SEPARATING THE 2030. The Board has endorsed the strategy to ensure key stations after extended outages and targeted clean energy access in support of our commitment GENERATION BUSINESS that Eskom remains relevant and sustainable as the investments. Despite the improvement, our to net-zero emissions by 2050. Options for the future of the generation business existing coal fleet approaches its end-of-life. generation performance remained unacceptable, are still under consideration, as it is dependent on not meeting the expectations set out in our We strengthened leadership, especially at top establishing a new holding company. The timing will The renewables subsidiary will operate independently shareholder compact. NTCSA accelerated management level, and continued to drive culture depend on legislation and government policy. Efforts of Eskom to allow for greater governance agility, infrastructure expansion under the 2024 Transmission transformation and workforce readiness through are focused on finalising power purchase agreements, competitive market positioning and enhanced access Development Plan, adopting innovative grid allocation targeted skills development, to support organisational ring-fencing the generation business, and developing a to public-private partnerships (PPPs). Nevertheless, it and curtailment frameworks to support renewable resilience. We maintained our focus on rebuilding future-fit operating model that includes a clean energy will remain accountable to Eskom as its shareholder. integration. The distribution business continued stakeholder trust through various campaigns, portfolio. The company must be agile and efficient to prepare to face challenges due to declining sales volumes structured engagement, governance reforms and for a competitive marketplace and ensure that we following the rise of distributed energy resources enhanced transparency. WAY FORWARD serve current and future customers with the desired and persistent electricity theft. In response, we are Based on recent developments affecting the electricity electricity supply solutions. The establishment of modernising distribution infrastructure, enhancing supply industry, we critically reviewed the unbundling Eskom Green will assist us in pivoting Eskom into security and exploring new revenue models. strategy to assess the operational, financial and a sustainable and competitive organisation while The operationalisation of NTCSA marked a key legislative implications of these developments. ensuring security of supply. It also forms part of our milestone in Eskom’s unbundling, to align operations Electricity market liberalisation journeys across the focus to identify the latest local and international with a competitive electricity market. globe and the likely evolution of the South African developments to reduce carbon emissions and other electricity market were also considered. This process air pollutants. was vital to ensure that we achieve the national objectives and strategic intent of the unbundling programme while positioning the organisation for continued growth and sustainability. 41 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Repositioning Eskom for sustainability in a transforming industry STRATEGIC CONTEXT REPOSITIONING OUR STRATEGY The refocused strategy is fully aligned with the The strategy is anchored in four strategic objectives: Eskom’s strategic direction is shaped by the In response to this dynamic and increasingly complex shareholder’s strategic priorities set out in its updated 1. Fix the current business: Stabilise operations, convergence of global energy trends, national policy operating environment, we have undertaken a Strategic Intent Statement, namely: improve financial sustainability and embed a and industry reforms, domestic energy security comprehensive review of our strategy. This review • Achieving universal access, together with availability, high-performance, ethical culture challenges and internal transformation imperatives. will ensure that we stay focused on the material shifts affordability and quality of electricity 2. Prepare for competition: Enable legal separation The organisation is being repositioned to remain in the electricity supply industry, including regulatory • Attaining sovereign and regional energy security and market reform, and ensure readiness for a relevant and resilient in a liberalised, decarbonising reform, decarbonisation imperatives and the evolving • Asserting South Africa’s leadership in the liberalised electricity supply industry and increasingly competitive electricity market, role of state-owned utilities. continental and global energy landscape to ensure that we can continue to deliver on our 3. Modernise the power system: Expand and digitise The review reaffirmed our strategic direction, but • Driving industrialisation and leading sectoral the grid to support decentralised energy resources mandate and meeting our stakeholders’ expectations. highlighted the need to recalibrate execution timelines innovation and modern technologies The evolving electricity supply industry offers a and intensify delivery against strategic objectives. • Transforming energy demographics by elevating the 4. Transition responsibly: Drive a JET that balances unique opportunity to redefine our role in South It builds on the operational and financial recovery role of women and youth energy security, affordability and sustainability Africa’s energy future. The formation of the GNU, achieved in the past year, but includes a sharper focus the implementation of the Electricity Regulation on operational recovery, financial sustainability and These priorities have been embedded in our Amendment Act, 2024 and the operationalisation of the transition to a low-carbon, customer-centric shareholder compact for FY2026 and will guide NTCSA provide a more stable and enabling policy energy future. the execution of initiatives to achieve our strategic environment for reform and innovation. objectives. Devolving our strategy In response, our strategy has been refocused to Our operating context presents a complex but evolve from a traditional utility to a resilient, future- OUR STRATEGIC OBJECTIVES Generation: Stabilise, diversify and pivotal moment in our transformation journey. While ready utility able to confront these challenges, unlock Eskom’s strategy is designed to deliver measurable decarbonise we have made measurable progress in stabilising new opportunities and ensure the organisation’s outcomes over the medium term, including improved The generation business is focused on operations and improving financial performance, long-term sustainability and relevance by competing, energy availability, expanded clean energy capacity, stabilising plant performance, diversifying enhancing stakeholder confidence and aligning with collaborating and leading as a central player in a reduced emissions and enhanced customer service. It is underpinned by strong governance, stakeholder the energy mix and enabling a just national energy policy, we continue to face significant restructured industry. To achieve this vision, our engagement and a commitment to ethical leadership. transition to a low-carbon future. longer-term structural, financial and environmental refocused strategy revolves around: challenges. These include constrained tariff increases, • Strengthening operational performance and NTCSA: Grid expansion and market The organisation’s transformation is being above-inflation cost increases, escalating municipal consistently overcoming the need for loadshedding operationalised through the strategic repositioning enablement arrear debt, the need for accelerated infrastructure • Enhancing financial sustainability through cost of its core business units – Generation, Transmission NTCSA is central to enabling a investment, and the imperative to decarbonise in line discipline and revenue diversification (through NTCSA) and Distribution. Each area competitive electricity market and with national and global commitments. • Expanding transmission infrastructure to connect is executing a tailored strategy aligned with our new generation capacity unlocking new generation capacity. Our steadfast commitment to sustainability is overarching objectives and the evolving electricity underpinned by a comprehensive environmental, • Accelerating the integration of renewable energy supply industry. The associated initiatives are Distribution: Customer-centric, digitally social and governance (ESG) framework that through Eskom Green discussed as part of our strategic objectives. enabled and financially sustainable is integrated into our annual Corporate Plan, • Transforming the business model to accelerate operational priorities and performance metrics. unbundling and enable broader market The distribution business is being This framework supports our dual mandate of participation restructured into NEDCSA, with a powering economic growth and delivering on our • Investing in people, partnerships and digital focus on customer-centricity, digital developmental mandate. Matters relating to our capabilities to spearhead innovation and resilience transformation and financial recovery. ESG approach are covered throughout this report, particularly in the sections dealing with leveraging governance for transformation, interacting with the environment, growing our people and sustaining communities. 42 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Repositioning Eskom for sustainability in a transforming industry continued These objectives are supported by: escalate to more than R300 billion by FY2030. We are PREPARE FOR COMPETITION: FACILITATE A We are implementing the following additional • Aligning with national energy priorities and the pursuing innovative solutions such as the distribution COMPETITIVE FUTURE ENERGY INDUSTRY initiatives to prepare for competition: shareholder’s strategic priorities agency agreement framework to improve revenue In response to the liberalisation of South Africa’s • Driving the development of a clean energy project • Capacitating strategic enablers such as governance collection, but broader political intervention is needed electricity supply industry, we are actively preparing pipeline through the establishment of Eskom Green and leadership, digital transformation and to reverse this alarming trend. Financial sustainability for this competitive future. Legal separation of the and using public-private partnerships and private technology, finance, human resources, stakeholder is further challenged by inadequate tariffs, declining Generation and Distribution businesses is progressing, sector participation engagement and strategic delivery sales volumes and the ongoing impact of crime, fraud with NTCSA already operational. However, the • Accelerating the execution of the TDP by front- and corruption. We are addressing performance and financial viability of Distribution is still a concern end loading projects and enabling independent • Adapting business unit strategies for the generation, ethical challenges through enhanced governance, due to escalating municipal debt and tariffs that do transmission providers distribution and transmission businesses consequence management and the implementation of not adequately reflect all the elements of supplying • Integrating ESG dimensions into our strategy • Pursuing new revenue streams by exploring new a fraud analytics platform. electricity to the end-consumer. • Leveraging strategic partnerships and funding products and markets models to unlock investment and innovation Immediate initiatives to stabilise operations and  efer to “Reflecting on our operating context IR R We are advocating for the finalisation of the draft restore financial sustainability include: These objectives are interdependent and guide the – Adapting our business model for sustainability IRP and the Retail Tariff Plan (RTP), which are • Moving generating plant availability towards 70% critical to long-term investment planning and market organisation’s transformation and execution priorities. through unbundling” from page 40 for more by FY2028 through the refocused Generation participation. These objectives are designed to address immediate information on the progress on unbundling our Operational Reliability and Sustainability Plan business operational challenges, prepare for structural • Reducing reliance on OCGTs and improving plant We are focused on providing a balanced and diversified reform and, ultimately, position Eskom for long-term performance through midlife refurbishments energy mix based on existing coal and nuclear, sustainability in a transformed industry. The Generation business is transitioning from a • Driving initiatives to improve environmental introducing gas for base-load power, together with traditional base-load provider to a diversified energy renewables, energy storage systems including battery FIX THE CURRENT BUSINESS: compliance such as exploring clean coal, while player, with a focus on flexible, clean energy solutions. energy storage systems (BESS) and pumped hydro, to PURSUE FINANCIAL AND OPERATIONAL seeking exemptions where necessary This includes the development of a clean energy achieve overall security of supply to meet South Africa’s SUSTAINABILITY • Pursuing innovative solutions to improve municipal pipeline, participation in battery storage and future payment levels and reduce municipal arrear debt growing electricity demand in a sustainable manner. We Eskom’s immediate priority is to stabilise operations gas-to-power projects, and the establishment of by rolling out the distribution agency agreement have an initial pipeline of at least 2GW of clean energy and restore financial sustainability. This objective is Eskom Green as a separate subsidiary to spearhead framework to defaulting municipalities and projects ready for execution in the short to medium anchored in disciplined execution of the Generation investment and innovation in renewable energy. proposing other solutions to National Treasury term, and we are developing a pipeline of 5.9GW of Recovery Plan, the implementation of cost-saving clean energy projects – including solar PV, wind, battery initiatives and the entrenchment of a high- • Prioritising customer-centricity with a focus on In preparation for restructuring into NEDCSA, storage and gas-to-power projects – to diversify the performance, ethical culture across the organisation. revenue recovery initiatives, such as accelerating Distribution is introducing a four-line business – energy mix in the longer term. the rollout of smart meters, improving payment EDx Grids, EDx Change, EDx Edge and EDx During the past year, we achieved a significant levels across all customer categories and reducing Serve – designed to support decentralised energy, These reforms will enable Eskom to compete milestone of 310 consecutive days without electricity theft customer-centric services and energy trading in the effectively in a restructured market while fulfilling loadshedding up to 30 January 2025, driven by future. The Distribution System Operator (DSO) • Implementing cost optimisation and revenue our mandate to provide reliable, affordable and improved generating plant availability, reduced and Distribution Energy Trader (DET) functions will recovery programmes sustainable electricity. reliance on OCGTs and the successful return of manage distributed generation, facilitate wheeling and key units from long-duration outages, including the • Intensifying the focus on internal controls and governance processes to combat crime, fraud and offer new products such as green energy attributes commercial operation of Kusile Unit 5 under the and demand-side management services. new build programme. These operational gains were corruption supported by Government’s debt relief support • Strengthening consequence management and covering most of our debt servicing obligations, leadership accountability, and enhancing safety allowing surplus cash from operations to be released compliance for critical maintenance and infrastructure investment. • Embedding a high-performance, ethical culture through our culture transformation programme However, systemic risks persist. Municipal arrear debt while supporting leadership stability and employee escalated further to R94.6 billion by year end, despite development and reskilling, together with fostering the municipal debt relief programme. If current the innovation and agility required to respond to mitigation initiatives are unsuccessful, this could the evolving energy landscape 43 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Repositioning Eskom for sustainability in a transforming industry continued MODERNISE THE POWER SYSTEM: LEVERAGE for five coal-fired power stations scheduled to shut These efforts are supported by strategic partnerships, GOVERNANCE AND LEADERSHIP TECHNOLOGY AND INFRASTRUCTURE down by FY2030. This relief enables continued blended finance models and public-private We are committed to restoring public trust through The transformation of South Africa’s electricity operation of these stations while we implement collaboration to mobilise investment in clean energy organisational integrity and strengthened governance, supply industry demands a modern, flexible and targeted emission reduction initiatives and refine our infrastructure while maintaining system reliability and ethical leadership and a high-performance culture digitally enabled power system. In response, we are repowering and repurposing plans. affordability. aligned to our values. During the past year, we set accelerating investment in infrastructure, digitalisation up the Group Investigations and Security (GIS) unit and smart technologies across the value chain. Over Our approach to decarbonisation is pragmatic and STRATEGIC ENABLERS to proactively address crime, fraud and corruption. R100 billion has been allocated to strengthen and phased. Four older coal-fired stations – Camden, Our enabling functions – supporting governance, This unit works in tandem with the Ethics Office and expand the transmission and distribution networks Hendrina, Grootvlei and Arnot – will continue operating technology options, finance, human resources, Internal Audit to ensure that misconduct is swiftly over the next five years, with a focus on unlocking until FY2030 to support energy security, as delays in strategic delivery and stakeholder engagement identified, investigated and addressed. grid capacity, enabling renewable energy integration delivering and connecting IPP capacity have constrained – are foundational to the successful execution of and improving system reliability. Distribution will roll the power system. In parallel, we are accelerating the our strategic initiatives. These functions are being A fraud analytics platform has been deployed out around 7 million smart meters and 250 microgrids development of a clean energy pipeline. repositioned to provide agile, integrated support to enhance early detection and prevention of over the next five years to support demand flexibility, to the core businesses to accelerate the delivery of irregularities in real time, while cyber-security controls The JET strategy has been decoupled from the Eskom’s strategic objectives. have been strengthened to safeguard Eskom’s digital reduce energy losses and provide customer-centric station shutdown schedule, allowing repowering services. infrastructure. These efforts are essential to improving and repurposing (R&R) projects to continue operational discipline, reducing financial leakage and We are elevating digitalisation as a strategic independently. This ensures that alternative reinforcing our social licence to operate. imperative to improve performance and keep up with economic opportunities and clean energy the technology trends driving development of the capacity are developed in parallel with the gradual electricity industry. To this end, we are implementing decommissioning of coal assets, to ensure that advanced digital solutions to enhance operational communities are not left behind as the energy mix Transparency and reporting efficiency and governance. These initiatives will not evolves. Flagship R&R initiatives at Komati, Grootvlei, Camden and Hendrina include microgrid assembly, • Ensure comprehensive and transparent only modernise our infrastructure, but also position communication of performance and copper recycling and training centres to reskill the organisation to lead in a decentralised, digital and decarbonised energy future. workers and support local economic development. sustainability initiatives • Implement the Fraud Prevention Plan to 1 Risk management, culture The strategy directly addresses key risks – such as and oversight stranded assets, regulatory non-compliance and social combat fraud, corruption and criminality IR Refer to “Digital transformation and technology” • Foster a positive disruption – while positioning Eskom as a leader in • Guide all employees in managing ethical for more information on these initiatives high-performance South Africa’s energy transition. issues ethical culture aligned G We are pursuing environmental and social with its values TRANSITION RESPONSIBLY: STRIVE FOR • Protect Eskom’s sustainability through: NET-ZERO EMISSIONS BY 2050 assets through • Reducing water consumption by 43% by FY2030, Governance structures We are committed to supporting South Africa’s security measures to with site-specific water efficiency plans at priority • Provide clear governance transition to a low-carbon economy in line with the ensure operational stations and leadership structures country’s commitments under the Paris Agreement and the Climate Change Act, 2024. Our JET strategy • Ash beneficiation projects to reduce waste and support circular economy initiatives • Strengthen auditing in the business to uphold 2 3 sustainability • Investigate fraud, is central to this commitment, balancing energy governance corruption, and criminal security, affordability and environmental sustainability • Emission reduction technologies such as flue gas activities through while ensuring socio-economic resilience in affected desulphurisation (FGD), fabric filter plant (FFPs) • Separate Eskom into Group Investigations communities. and low-NOx burners entities to enhance and Security • Decoupling the JET strategy from the Generation operational efficiency We have received a favourable decision from shutdown plan to drive decarbonisation and socio- the Department of Forestry, Fisheries and the economic transformation objectives Environment (DFFE) granting a suspension of compliance with Minimum Emission Standards (MES) 44 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Repositioning Eskom for sustainability in a transforming industry continued DIGITAL TRANSFORMATION AND OVERSIGHT OF STRATEGIC DELIVERY • Reducing municipal arrear debt growth and MANAGING DEPENDENCIES AND RISKS TECHNOLOGY EXECUTION improving payment levels through the distribution Our strategy is ambitious but grounded in the realities We are executing a comprehensive digital The Strategic Delivery Unit (SDU) plays a vital role agency agreement framework and other of a transforming energy sector. The organisation has transformation strategy to modernise our operations, in coordinating the execution of Eskom’s strategic mechanisms made measurable progress in stabilising operations improve the customer experience and strengthen initiatives, including the Cost Optimisation and • Expanding and strengthening the transmission and and improving financial performance, but the path to internal controls. Key initiatives include: Revenue Enhancement Programme (CORE), our clean distribution networks to address grid constraints long-term sustainability will require continued focus, • Deploying a fraud analytics platform to detect and energy pipeline and the unbundling programme. The and contribute to regional energy integration agility and support from key stakeholders. prevent irregularities in real time active performance management parenting strategy • Rolling out smart meters and microgrids to has been developed to govern the relationship The successful execution of Eskom’s strategy relies on • Implementing a coal automation system to improve contribute to modernising the distribution network between Eskom Holdings and its subsidiaries. several critical dependencies: quality control and reduce fraud and theft in the • Commissioning at least 2GW of clean energy • Regulatory certainty and market reform, including coal supply chain capacity through Eskom Green and strategic STRATEGIC PARTNERSHIPS AND timely implementation of the IRP and Retail • Developing a data warehouse and advanced partnerships FUNDING MODELS Tariff Plan analytics platform to support predictive • Investing in people through skills development and To deliver on our strategic objectives without placing • Regulatory approval of unbundled tariffs that maintenance and real-time operational decision- succession planning undue pressure on the balance sheet, we will pursue adequately reflect the cost of supplying electricity making • Supporting economic transformation and alternative funding models, including PPPs, private and balance affordability with Eskom’s financial • Strengthening cyber-security infrastructure and sector participation and finance mechanisms blending localisation through procurement and social sustainability tools to protect against digital threats and ensure commercial and concessional financing. These models investment • Continued support from National Treasury through business continuity are critical to accelerating infrastructure rollout – • Enabling a JET that is socially inclusive and the debt relief programme and the Department • Exploring blockchain use cases to enhance particularly in clean energy, transmission expansion environmentally responsible of Electricity and Energy, together with support transparency and traceability in procurement and and digital transformation – as well as enabling the JET As we advance Eskom’s strategic agenda, we must for enforcing payment discipline in municipalities supply chain management and restoring public trust. remain vigilant to the risks that could jeopardise and enabling the distribution agency agreement delivery. The complexity of the energy transition, framework PEOPLE CULTURE AND CAPABILITIES These partnerships not only unlock capital and reduce To embed ethical behaviour across the organisation, on-balance sheet borrowing, but also bring technical the scale of infrastructure investment needed and • Effective stakeholder engagement, particularly with we launched the 1:1:6:10 culture transformation expertise, innovation and risk-sharing capabilities that the interdependencies across regulatory, financial organised labour, communities and civil society to programme. This aligns leadership behaviours with are essential for our long-term sustainability. and operational dimensions all introduce significant ensure a just and inclusive transition Eskom’s values – zero harm, integrity, innovation, uncertainty. To navigate this landscape effectively, • Access to concessional and blended finance sinobuntu, customer satisfaction and excellence – HOW WE WILL MEASURE SUCCESS Eskom has embedded a robust risk management mechanisms to fund clean energy projects, grid and is supported by targeted interventions aimed at The updated Strategic Intent Statement issued by framework that identifies, monitors and mitigates expansion and digital transformation learning and development, consequence management the Department of Electricity and Energy outlines strategic risks across the organisation. In the section and effective performance management. Government’s expectations for Eskom over the that follows, we outline the key risks facing the We will continue to monitor these dependencies and medium term. These include: organisation and the measures in place to manage adapt our execution approach to ensure resilience Key priorities to build a high-performance, ethical them effectively. and agility in a rapidly evolving energy landscape. • Completing the legal separation process with the culture and a future-ready workforce include: unbundling of the distribution and generation • Leadership development and succession planning to businesses ensure stability and continuity • Ensuring energy security and system reliability by • Reskilling and upskilling of employees to support recovering generating plant availability to 70% over the Eskom of the future, including the JET and the medium term and resolving primary energy digital transformation challenges • Enhancing reward and retention strategies to • Achieving compliance with environmental and attract and retain critical talent emissions regulations for stations operating beyond • Promoting diversity, equity and inclusion, with a FY2030 focus on elevating the role of women, youth and • Maintaining a positive EBITDA margin and reducing persons with disabilities in the energy sector the gross debt to below R300 billion 45 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Mitigating risk and maintaining resilience We are committed to effectively mitigating risk and oversees the broader risk landscape, individual Board OUR RISK LANDSCAPE maintaining resilience, which is essential to supporting committees remain responsible for risks within their IR Refer to “Reflecting on our operating context” from As part of our strategy development and execution, page 38 for further information Eskom’s long-term sustainability. This is especially areas of focus; in the case of the Audit Committee, this we regularly scan our environment to identify shifts important given our vital role in the South African means overseeing risks and opportunities related to in our operating context and risk landscape driven by economy, our impact on society and the environment, assurance, controls, financial management and reporting. local and global developments. and the ongoing transition of the energy sector. Management serves as the first line of defence; We aim to contribute to a more resilient society by: therefore, day-to-day management of risk and The following factors emerged from our most recent scan. The potential threats and opportunities, and the • Embedding risk-intelligence and resilience practices resilience is delegated to Exco, supported by its Risk consequences thereof, inform our approach to mitigating risk and maintaining resilience. into all decision-making processes and Sustainability Committee. Exco implements the Enterprise Risk and Resilience Management Plan Potential impact on • Enabling people to take the right level of the right Threats and opportunities organisational risks risks for success and monitors risk performance and emerging risks quarterly, in line with Board-approved risk appetite Geopolitical developments resulting from the new US administration • Supporting the achievement of strategic objectives and tolerance levels. The assessment of our risk The new US administration has reversed climate commitments, withdrawing from Financial sustainability risks through informed, intelligent decisions landscape and risk appetite is embedded in our the Paris Agreement as well as the JETP with South Africa, favouring fossil fuels and may be affected by reduced We manage risk and resilience throughout the strategy development process, as illustrated below. reducing support for clean energy investments. Diplomatic and trade tensions with funding and lower sales to group using an integrated approach aligned with the US, particularly through recent tariffs imposed by the US, may impact global oil customers affected by global industry standards. Our Integrated Risk Management and coal prices and disrupt access to US markets and US-based technologies, trade Strategic risk foreign investment as well as development aid, posing risks to our operations and Standard conforms to ISO 31000 Risk management – appetite and Shaping our financing prospects Climate change response Guidelines, King IV, Government’s Risk and Integrity risk of strategy future through actions and compliance with Management Framework for SOCs, the Disaster strategy Deteriorating US relations may be mitigated by diversification to alternate markets options the Climate Change Act, 2024 Management Act, 2002 and the requirements of our development and strengthening ties through BRICS, G20 and regional partnerships. The EU’s €4.7 billion green energy investment package offers critical support for South may be affected by inadequate annual shareholder compact. Scanning our Risk of funding and investment, environment Africa’s JET and decarbonisation goals strategy delaying the just transition to a In line with King IV, the Board is responsible for misalignment low-carbon company the oversight and governance of risk. The Board and critical INTEGRATED AND assumptions approves the Enterprise Risk and Resilience Outcomes from the State of the Nation Address (SONA) PROACTIVE STRATEGY Management Policy and Plan, as well as the group’s Emerging risk DEVELOPMENT AND The 2025 SONA, themed “A nation that works for all”, emphasised Government’s Financial sustainability risks may and strategic risk appetite and tolerance levels, which sets out risk profile EXECUTION continued support in stabilising Eskom, reducing loadshedding and ensuring reliable be mitigated by diversifying Planning the level of risk we are willing to assume in pursuit strategy power supply revenue streams from new of our strategic objectives to address our financial, markets execution Government reaffirmed its commitment to infrastructure investment, particularly in the operational and structural challenges. Monitoring energy sector, to support economic growth, including accelerating the transition to Operational sustainability and and adjusting Risk of renewable energy and enabling private sector participation in the transmission network climate change risks may be The Board approved the separation of the Audit our direction execution mitigated by increased and Risk Committee in February 2025, enabling The enactment of the Electricity Regulation Amendment Act aims to establish a infrastructure investment and the establishment of a dedicated Risk Committee competitive electricity market. Economic reforms and industry policies may the transition to renewable stimulate electricity consumption and create new market opportunities to energy to enhance oversight and accountability over risk diversify Eskom’s revenue management across the organisation. The effective management of risk and resilience ensures that we can effectively formulate and execute our Outcomes from the World Economic Forum (WEF) strategy, operate with minimal disruption, respond to The 2025 WEF annual meeting in Davos focused on geopolitical instability and Operational sustainability risks IR For more information, refer to “Leveraging and recover from disruptions should they materialise, as climate change as critical global risks may be affected by extreme governance for transformation – Report by the Board and reflecting on its performance” from page 54 well as proactively leverage emerging opportunities. weather events and Interdependence in global energy supply chains and rising geopolitical and trade tensions threaten global markets, including fuel and technology imports, impacting geopolitical tensions To achieve this, our risk landscape is continuously monitored so that risks that impact our strategic operational sustainability and energy security. This may be mitigated by improving The Risk Committee is responsible for oversight of the regional and international cooperation to combat geopolitical threats overall risk management system on behalf of the Board, objectives are proactively identified and consistently ensuring that material risks and opportunities that could managed. By doing so, we ensure that appropriate Climate change is intensifying extreme weather events, causing damage to infrastructure affect the group are identified, evaluated, effectively structures and plans are in place to treat these risks and leading to power disruptions, demanding urgent adaptation measures. This may be managed and reported. While the Risk Committee and respond to and recover from incidents that could mitigated by opportunities to diversify energy sources and strengthen grid resilience threaten our ability to create and preserve value. 46 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Mitigating risk and maintaining resilience continued NATIONAL DISASTER PRIORITIES Our disaster priorities cover: Our Enterprise Resilience Programme oversees Our resilience efforts aim to enhance the disaster management and emergency preparedness. National simulation exercise organisation’s capability to respond and recover from Individual Exco members take accountability for risk Climate change-related disasters Extreme weather related to drought, adverse events and adapt to disruptive environments. monitoring and disaster contingency plans for each of Cyber-attack or catastrophic snow, heavy rains, thunderstorms, strong We comply with the Disaster Management Act, these disaster priorities. winds, veld fires and floods pose a risk 2002 and manage our response to major threats, system failure Simulation exercises are conducted regularly to to our infrastructure and may result in disruptions and disasters through dedicated resilience National blackout supply disruptions to customers. A national command centres. ensure that Eskom can continue to operate and National industrial action recover within a reasonably short time in the event simulation exercise, named Terra, was We manage eight national disaster priorities, which of a disaster. During the year, six grid exercises conducted on 6 February 2025 to test Nuclear incident the emergency response to flooding and are risks inherent to our operations that have a low were held, all of which simulated failure of the likelihood of occurring but could have disastrous Pandemic transmission grid across the provinces, in line with drought scenarios at national, divisional, consequences should they materialise. These were Grid Code requirements. Technical and non-technical provincial and site level. Recommendations Severe supply and demand constraint from Terra are being addressed by the recently consolidated from the previous 11 disaster vulnerabilities are continuously reviewed, with a focus priorities by integrating related risks, enabling a more Social and geopolitical instability on maintaining and enhancing the existing disaster disaster management working groups holistic and strategic approach to disaster planning. contingency plans. focused on climate change-related disasters, which will inform any revisions to the related disaster contingency plans. SR F or more on our approach to enterprise resilience, refer to “Governance – Enterprise resilience” in our 2025 sustainability report 47 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Mitigating risk and maintaining resilience continued OPERATIONAL AND STRATEGIC RISKS We assess operational risks across each area of the business based on the magnitude of the consequence and the likelihood of occurrence. Following that, our operational risks are aggregated into strategic risks across several risk categories, covering finance; operations (through our licensed activities of generation, transmission and distribution); environment and climate change; people, culture and safety; information and operational technology; legal and compliance; fraud and ethics; and stakeholder engagement. These categories are aligned to the Board’s risk appetite and tolerance levels and accountable owners are assigned to each risk. Key risk indicators are in place for all risks, serving as a set of leading indicators to ensure that risks are managed proactively and to understand the direction in which risks are moving, and at what rate. The strategic risks reflected in the table below are assessed to determine if they are operating outside of our risk appetite and tolerance levels, and are considered either within the risk appetite ( ), likely to breach the risk appetite ( ) or to have breached the risk appetite ( ). All strategic risks have treatment plans in place, as successfully treating these risks is paramount to our future success, although treatment plans may not immediately mitigate the risks or turn around performance due to their medium- to long-term nature. Related material Risk appetite statement Strategic risk description Treatments matters Material matters Finance M1 Strengthening leadership High appetite to return to While the group achieved a return to profitability in • Challenging NERSA’s MYPD 6 determination to Financial profitability at a group level FY2025, long-term financial sustainability remains at risk. secure more balanced tariff outcomes and support sustainability M2 Securing financial sustainability and hold positive cash balances NERSA’s MYPD 6 revenue determination has resulted in liquidity, with a R54 billion settlement agreed across all legal entities a revenue shortfall of around R250 billion over the next Operational • Leveraging NERSA’s R40 billion court settlement excellence three years. This outcome prevents the migration to an M3 Achieving operational excellence Risk appetite status: relating to historic RCA decisions to support liquidity adequate tariff path, constraining liquidity and our ability Legal separation to invest in sustaining and expanding our infrastructure • Engaging with NERSA and other stakeholders on a long-term tariff outlook M4 Enhancing environmental stewardship and delivering on our strategic objectives Future Eskom • Intensifying internal and external interventions to Our financial sustainability is further threatened by the Crime and Building a skilled workforce address arrear debt through long-term structural M5 inability to recover close to R95 billion in arrear municipal corruption solutions, given poor compliance by municipalities on and metro debt. This continues to compromise Government’s municipal debt relief programme M6 Furthering national developmental goals operational plans, the legal separation of the Distribution Division as well as access to funding for the Eskom of the • Maintaining adherence to the conditions of future Government’s amended R230 billion debt relief M7 Executing the legal separation package to enable shareholder loan-to-equity In addition to these systemic risks, finances may be conversion compromised by: • Delivering R50 billion in cumulative efficiencies over M8 Creating the Eskom of the future • Operational inefficiencies and above-inflationary the next five years through the cost optimisation and cost increases in some areas revenue enhancement programme M9 Advancing climate action • Losses due to crime, fraud and corruption • Optimising cash from operations and capital • High debt service costs expenditure to reduce reliance on debt funding M10 Upholding governance, compliance and ethics • Liquidity pressure to address generation plant • Pursuing PPPs to unlock future investment performance, environmental compliance and opportunities and support infrastructure expansion M11 Fighting crime, fraud and corruption network infrastructure investment • Implementing initiatives to enhance the prevention, detection, investigation and correction of crime, fraud and corruption 48 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Mitigating risk and maintaining resilience continued Related material Risk appetite statement Strategic risk description Treatments matters Generation operations High appetite to provide reliable While we have achieved a significant recovery in plant • Implementing the revised Generation Operational Reliability Plan, focusing on reducing unit trips, improving Financial electricity by delivering on the performance over the past year, Generation’s operational outage execution and strengthening people, plant and process performance sustainability refocused Generation Operational sustainability may be compromised by: • Executing strategic projects, including mid-life refurbishments, the Koeberg LTO and emission reduction Reliability Plan and other initiatives Operational • Poor environmental performance and non- projects excellence to consistently overcome the need compliance with environmental laws and regulations, for loadshedding. This will be • Collaborating with NECOM, OEMs and external utilities which may lead to the loss of licence to operate and Environmental achieved by operating the plant • Accelerating the adoption of advanced analytics to support predictive maintenance stewardship the shutdown of generating plant and/or litigation efficiently and safely through a • Converting OCGT units from diesel to gas to reduce operational costs skilled and competent workforce, • Poor plant availability which results in system Skilled workforce constraints and loadshedding, eroding stakeholder • Implementing the Environmental Management Plan to ensure compliance with MES exemption conditions, while limiting environmental harm. revised atmospheric emission licences as well as water and waste management requirements confidence Future Eskom Generation will further leverage opportunities through partnerships • Poor quality of outage execution • Addressing common plant failures, fixing water leaks, dredging dams and enhancing ash management Climate action towards becoming a cleaner practices • Unreliability of new generating units producer of electricity, thereby • Strengthening leadership and technical capabilities through targeted development initiatives and skills Crime and • Skills and resource constraints corruption enabling South Africa’s aspiration pipelining of carbon neutrality by 2050 • Theft and vandalism of critical infrastructure due to • Diversifying the energy mix through a pipeline of clean energy projects and implementing JET projects at criminal activity, which may lead to loss of production ageing power stations in parallel with continued operations Risk appetite status: and/or financial losses • Enhancing security capacity and developing an integrated security system to combat theft and vandalism of infrastructure and resources • Implementing coal automation systems to monitor coal delivery from mines to power stations and improve coal quality assurance Transmission operations High appetite to provide a reliable NTCSA’s operational sustainability may be compromised • Accelerating execution of the TDP through a dedicated oversight committee to enable timely grid access for Financial and efficient transmission network, by: new generation capacity sustainability System Operator and energy • Insufficient transmission infrastructure to integrate • Overseeing the performance of EPC contractors for transmission lines and substations to expedite market service in South Africa and Operational new generation sources, due to resource constraints infrastructure rollout excellence designated electricity markets, as and delays in statutory approvals to implement the well as to protect the national grid • Refurbishing ageing assets to reduce equipment failures and faults and improve system reliability TDP timeously, which may lead to reduced grid Legal separation using load reduction and • Implementing climate adaptation plans to mitigate the impact of severe weather events on NTCSA stability and reliability infrastructure Future Eskom loadshedding as critical tools to prevent a national blackout. This • The impact of climate change, including severe • Strengthening cyber-security and physical protection measures to reduce exposure to crime, fraud, theft and weather events Climate action will be achieved through the vandalism and limit service disruptions implementation of the • Cyber-security threats and physical security risks, • Collaborating with stakeholders on policy and regulatory developments for a competitive electricity market Crime and Transmission Sustainability including the incidence and severity of crime, fraud, corruption and the establishment of an independent system market operator Improvement Plan, which corruption and other incidents affecting NTCSA incorporates the TDP • Applying the revised subsidiary governance framework and active performance management parenting infrastructure and operations strategy, which govern the relationship between Eskom and NTCSA Risk appetite status: • Various external dependencies, including enabling policy, legislation and regulatory frameworks, which influence the implementation of a competitive market and establishment of an independent system market operator 49 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Mitigating risk and maintaining resilience continued Related material Risk appetite statement Strategic risk description Treatments matters Distribution operations High appetite to power economic Distribution’s operational sustainability may be • Enhancing security technologies and intensifying meter audits and the removal of illegal connections Financial growth through the distribution of compromised by: • Implementing the zero buyers reduction programme to identify and regularise zero buyers as well as low sustainability reliable electricity and related • High levels of energy losses, caused by electricity buyers energy services to customers in a Operational theft, illegal connections, meter tampering, illegal • Prioritising a new software solution for the online vending system, as well as upgrades to customer billing and excellence sustainable manner. Furthermore, vending, theft and vandalism of network equipment, we aim to improve revenue customer relationship management systems as well as errors Legal separation collection through a focused • Collaborating with stakeholders to prevent vandalism and theft of network infrastructure financial recovery programme for • Escalating arrear municipal and metro debt due to • Rolling out smart meters to reduce electricity theft and enable new products and services Future Eskom financial sustainability poor payment levels, which also undermine the • Engaging with National Treasury to address poor compliance by municipalities on Government’s municipal Crime and financial sustainability of NEDCSA Risk appetite status: debt relief programme and reinforcing Eskom’s legal rights corruption • Customer defection and an overall trend of • Implementing distribution agency agreements and active partnering with defaulting municipalities to improve declining sales volumes due to evolving customer revenue collection and service delivery needs, energy consumption patterns and increased competition from embedded self-generation • Expanding and strengthening the distribution network, including commissioning of battery storage and technologies microgrids • The absence of a fair rules-based market which may • Improving supply reliability and customer-centricity through digital technologies and enhanced service lead to Eskom disproportionately losing good paying models customers and retaining poor paying customers • Pursuing unbundled tariff structures • Underinvestment in ageing distribution infrastructure • Engaging on electricity industry market reforms and evolving the distribution business model in line with which may lead to an inability to sustain network future energy trends to meet customer expectations and unlock new revenue opportunities performance within regulatory norms and meet future demand Environment and climate change High appetite to reduce our Deteriorating environmental performance and non- • Ensuring adherence to the conditions of the MES exemptions granted by the Minister of DFFE and revised Financial negative impact on the compliance with environmental laws and regulations, atmospheric emission licences for several power stations sustainability environment and society, by caused by inconsistent execution of environmental • Advancing emission reduction projects at priority stations, including refurbishment of electrostatic reducing our contribution to management practices and challenges in meeting Operational precipitators, retrofitting NOx burners and installation of fabric filters bags and flue gas desulphurisation excellence emissions and discharge pollution, environmental licence conditions, may lead to plant as well as to make a positive environmental degradation, litigation, penalties and fines, Environmental impact on water conservation, air loss of licences to operate and the shutdown of plant • Evaluating and testing the scalability of emerging technologies such as direct sorbent injection to reduce SO2 stewardship quality and biodiversity. This will be emissions achieved by complying with Efforts to transition from coal dependency to a lower- • Collaborating with Government on the phased implementation of carbon tax and sectoral emission targets Future Eskom relevant environmental legislation carbon and climate-resilient company may be for the electricity supply industry compromised due to capital constraints, a complex Climate action regulatory environment, lengthy procurement and • Executing water performance recovery plans to reduce environmental legal contraventions Risk appetite status: Governance and approval processes, scalability challenges for renewable • Implementing Eskom’s ESG plan to strengthen the management of environmental and climate-related risks High appetite to mitigate and opportunities ethics energy projects, as well as grid integration and stability greenhouse gases, safeguard our challenges. The lack of control over market dynamics and • Exploring development financing and public-private partnerships for environmental and climate adaptation infrastructure from adverse climatic clean energy investments hampers efforts to reduce projects changes and shape sustainable reliance on coal-fired production. The impact of climate development best practices by • Implementing climate adaptation plans across the group to enhance resilience to climate-related disruptions change may lead to supply disruptions and stranded assets, implementing climate change requiring investment to secure and adapt operations and • Obtaining environmental authorisations for new build and JET projects adaptation strategies and infrastructure • Establishing Eskom Green, a wholly owned renewable energy subsidiary Eskom’s ESG plan • Implementing repowering and repurposing projects at ageing power stations in parallel with continued Risk appetite status: operations 50 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Mitigating risk and maintaining resilience continued Related material Risk appetite statement Strategic risk description Treatments matters People, culture and safety No appetite to negatively affect Health and safety of employees and contractors may be • Embedding the new “See – Act – Immediately” initiative to strengthen a proactive safety culture Leadership human health, in accordance with compromised by failing to effectively implement • Applying lessons learned and safety insights across sites to eliminate fatalities and reduce safety incidents and strength our non-negotiable value of Zero occupational health and safety improvement initiatives, lost-time injuries Harm, by eliminating fatalities and which may lead to harm (injuries, fatalities or damage to Operational • Establishing structures to improve contractor safety performance and align with occupational healthy and safety excellence reducing injuries. Furthermore, we the environment, equipment or property), thereby have a high appetite for ensuring decreasing productivity and damaging our reputation. best practices Skilled workforce the health and safety of Furthermore, this risk may lead to potential harm to the • Collaborating with stakeholders to broaden the reach and impact of public safety campaigns employees, contractors and public, including those engaged in criminal activity and • Launching holistic health programmes to support both mental and physical wellbeing in the workplace Developmental members of the public exposed to the dangers of electricity • Executing the strategic workforce plan to ensure the availability of critical skills for future operational needs mandate Risk appetite status: Critical workforce segmentation and skills may not be • Monitoring and closing the skills gaps identified through the skills audit, while strengthening the learner pipeline Governance and available as required by the strategic workforce plan, • Repositioning the Eskom Academy of Learning to meet emerging business needs and future skills requirements ethics High appetite for a skilled, which may lead to a reduction in productivity and an competent, ethical and • Building leadership capacity and continuity and implementing leadership development programmes inability to achieve strategic objectives. Furthermore, an high-performance organisation inadequate learner pipeline may compromise the ability to • Fostering a culture of high performance, ethics, innovation and agility, while encouraging a speak-up culture by embedding an innovative meet future skills requirements. The potential lack of a • Leveraging performance management systems to align performance with rewards and reinforce accountability culture and accountable leadership speak-up culture in response to ethical issues, caused by and consequence management mistrust and fear of victimisation, may perpetuate unethical • Advancing JET repowering and repurposing projects to support workforce reskilling and upskilling Risk appetite status: behaviour Information and operational technology High appetite to lead the direction Exposure to malicious activities and cyber-security threats • Simplifying, standardising, optimising, consolidating and rationalising the technology landscape and Financial of information and operational may affect critical information technology systems and lead infrastructure environment across the group sustainability technology proactively and to legal, operational and financial consequences. Outdated • Deploying advanced threat detection systems to replace outdated endpoint protection and enhance cyber- holistically, while enabling, endpoint security technology which has not adjusted to Operational security response capabilities excellence empowering and co-creating new and advanced cyber-security threats, unsupported innovative technology solutions legacy systems and weak privileged access controls may • Engaging with divisional and subsidiary operational technology functions to ensure alignment and a unified Future Eskom through partnerships in support of lead to criminal activity, data corruption and/or loss, approach to limit exposure to threats our strategic intent operational disruptions and non-compliance with laws and • Modernising legacy systems and prioritising the decommissioning and replacement of unsupported systems Governance and regulations • Advancing hardware and software upgrades for critical systems ethics Risk appetite status: Furthermore, cyber-security attacks on critical operational • Strengthening access controls and technology security practices across the group Crime and technology systems, caused by the exploitation of system • Establishing a business process management function to identify and improve ineffective processes corruption vulnerabilities, could lead to damage to critical • Monitoring key risk indicators relating to cyber-security posture and system availability infrastructure, system downtime, a partial or total loss of • Implementing Eskom’s digital transition strategy and data strategy, including artificial intelligence capabilities, control of systems and/or loss of visibility of the power advanced data analytics and improved data management principles network, with potentially devastating consequences These risks are further amplified in areas where audit findings have identified inadequate controls or circumvention of controls 51 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Mitigating risk and maintaining resilience continued Related material Risk appetite statement Strategic risk description Treatments matters Legal and compliance No appetite for any non- The ability to provide advice or independent assurance of our • Strengthening the PFMA Loss Control Department to improve PFMA compliance monitoring and reporting Financial compliance with compliance compliance maturity status may be compromised by inadequate • Continuous monitoring and assessments on the application of internal controls sustainability obligations, or to compromise on time, resources and systems dedicated to compliance, which • Addressing audit findings through the implementation of a dedicated audit recovery programme compulsory requirements or may lead to delays in effectively identifying and addressing any Operational • Revising procedures to support consistent and effective application of the PFMA excellence voluntary commitments, which may inadequacies in the management of existing compliance cause harm to the organisation or obligations, thereby increasing the risk of contraventions • Implementing Eskom’s Legal and Regulatory Compliance Plan to enhance management of compliance Environmental to the broader environment in obligations Incomplete or inaccurate disclosure of irregular expenditure, stewardship which we operate • Improving compliance reporting systems, processes and resourcing to support timely and accurate fruitless and wasteful expenditure as well as losses due to disclosures Developmental Risk appetite status: criminal conduct in the financial statements, due to PFMA mandate • Rolling out compulsory training on ethics, fraud awareness and PFMA compliance reporting procedures not being effectively implemented, resulting in a qualified audit opinion and eroding stakeholder • Improving and accelerating implementation of consequence management Governance and confidence. Reliance of PFMA reporting on a self-declaration • Fostering a high-performance, ethical culture where individuals feel encouraged and supported to report ethics process, the effectiveness of which is dependent on a culture instances of non-compliance that supports openness and accountability, where speaking up is encouraged and supported Fraud and ethics No appetite for unethical conduct, Crime, fraud and corruption, if not effectively managed, may • Executing the revised Fraud Prevention Plan through enhanced management structures Leadership crime, fraud and corruption in worsen and negatively affect our financial and operational • Conducting reviews and investigations through Internal Audit and the newly established Group Security and strength general; we have adopted a sustainability and reputation Investigations Department zero-tolerance approach through Financial Failure to implement the Fraud Prevention Plan in an integrated • Rolling out compulsory training on ethics, fraud awareness and PFMA compliance sustainability improved mechanisms redressing governance and compliance manner, inadequate resources and skills, inadequate controls • Executing the digital procurement programme to transform procurement and supply chain management into an and the circumvention of controls, as well as lack of automated and integrated process Operational challenges excellence management accountability and oversight to prevent, detect • Addressing procurement irregularities and reducing reliance on informal tendering Risk appetite status: and correct unethical behaviour may lead to financial losses, • Expediting employee disciplinary processes to ensure timely consequence management and accountability Governance and operational disruptions, reputational damage and deterioration ethics • Monitoring supplier transgressions and enforcing disciplinary actions through the Supplier Review Committee of our ethical culture • Enhancing systems and controls and implementing digital tools to support early detection of fraud and corruption Crime and These risks are further amplified by the potential for fraud, • Centrally monitoring the impact of treatment plans relating to crime, fraud and corruption in Generation, corruption corruption and unethical behaviour in procurement and supply NTCSA and Distribution through the Group Investigations and Security Department chain management practices due to procurement irregularities • Improving whistle-blowing processes and fostering a high-performance, ethical culture where individuals feel and collusion with suppliers encouraged and supported to report wrongful behaviour • Improving root cause analysis of crime, fraud and corruption and closing the gaps holistically across the group Stakeholder engagement High appetite to restore our Our reputation has been negatively affected by several issues, • Implementing stakeholder engagement plans through internal and external initiatives to rebuild trust and Effective reputation and role in society, by including environmental challenges, supply constraints, high levels credibility stakeholder enhancing our stakeholder of loadshedding in recent years, unaffordable tariff increases, high • Strengthening collaboration with government departments and structures engagement engagement capability, proactively debt levels as well as allegations of fraud and corruption. Failure influences the • Monitoring key market developments which impact Eskom and its stakeholders aligning our approach to to address these issues and proactively respond to stakeholder outcomes of all stakeholders’ expectations and expectations may erode trust and result in the loss of key • Finalising and implementing the Eskom Media Policy to guide transparent, consistent and responsible material matters ensuring better organisational stakeholder relationships. This could impact the organisation on external communication performance. This is underpinned multiple levels, threatening achievement of our strategic • Monitoring key risk indicators such as stakeholder sentiment and media share of voice to assess reputational by an effective, efficient, timeous objectives in the short, medium and long term. An inability to health and integrated communication plan sustain recent performance improvements may hinder efforts to • Relaunching reputation pulse surveys to obtain insights into public perception and stakeholder trust and restore and strengthen Eskom’s reputation develop appropriate responses Risk appetite status: 52 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Leveraging governance for transformation Report by the Board and reflecting on its performance 54 Report by the Audit Committee 59 Conclusion on assurance and controls 60 Report by the Business Operations Performance Committee 62 Report by the Governance and Strategy Committee 63 Report by the Human Capital and Remuneration Committee 64 Remuneration report 65 Report by the Investment and Finance Committee 71 Report by the Social, Ethics and Sustainability Committee 72 Fostering an ethical culture 73 Fighting crime, fraud and corruption 75 Upholding good governance 81 53 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Board and reflecting on its performance PURPOSE To ensure effective execution of its responsibilities, ANNUAL BOARD EVALUATION The Board fulfils its governance mandate in alignment the Board is supported by the following seven The Board committee reports that follow disclose FOR FY2024 with the Companies Act, 2008, the Public Finance committees: meeting attendance based on the actual number The Board is committed to sound governance Management Act, 1999 (PFMA) and the principles of • Audit Committee (AC), formerly the Audit and of meetings held during the year. Notably, the total practices, adopting the principles of King IV and King IV. It sets the strategic direction of the organisation Risk Committee until February 2025 number of meetings held exceeded the scheduled the Protocol on Corporate Governance in the by integrating strategy, risk, performance and • Business Operations Performance Committee Board calendar approved by the shareholder, Public Sector, 2002. Although principle 9 of King IV sustainability as interdependent pillars of value creation. (BOPC) reflecting the Board and its committees' recommends that boards conduct a formal evaluation • Governance and Strategy Committee (GSC) commitment to adequately address governance every second year, we have conducted an evaluation Through a robust governance framework and clearly annually to support continued improvement. • Human Capital and Remuneration Committee (HCR) requirements and respond to heightened defined delegations of authority, the Board provides • Investment and Finance Committee (IFC) governance demands. oversight and approves key policies, plans and initiatives During the year, the Board performed a self-assessment that enable the effective execution of Eskom’s strategy. • Risk Committee (RC), established in February 2025 Board members also participate in workshops, relating to performance over FY2024, facilitated by It monitors management’s performance and strategic • Social, Ethics and Sustainability Committee (SES) portfolio and standing committee meetings and the Office of the Company Secretary, with the aim delivery to ensure accountability and the integrity site visits, as well as other engagements with of reflecting on governance practices, identifying of organisational reporting. Furthermore, the Board various stakeholders. Given the ad hoc nature of areas for improvement as well as strengthening In February 2025, the Board approved the oversees the identification and management of these engagements, attendance is not formally leadership and oversight. This self-assessment followed separation of the Audit and Risk Committee compliance obligations and enterprise risks, supported recorded and therefore not disclosed in this report. the independent evaluation undertaken by Mazars (ARC) into a separate Audit Committee and Risk by sound internal controls and a risk-based internal Committee, in accordance with Eskom’s revised Advisory Services (Pty) Ltd (Mazars) for the prior year. audit function. MOI and to enhance oversight and accountability by bringing greater focus to the distinct The overall results indicate a generally effective board, In fulfilling its role, the Board also fosters a high- although several areas require targeted improvement responsibilities of these disciplines. The terms performance, ethical culture that reflects Eskom’s of reference of the separate committees were  efer to “Remuneration report – Remuneration IR R to enhance governance and strategic impact. While values and reinforces its commitment to operating as approved on 30 May 2025. based on meeting attendance” on page 66 for a some of the issues raised are recurring, most of the a responsible corporate citizen – ethically, socially and breakdown of scheduled, additional and ad hoc issues raised in Mazars’ previous assessment have been environmentally. The Audit Committee retains the same membership meetings held by the Board and its committees addressed. The Board improvement plan incorporates as the original ARC. The Risk Committee is the findings from these evaluations and highlights the COMPOSITION AND BOARD COMMITTEES comprised of seven directors, as follows: following priority areas for improvement: The Audit Committee report includes the oversight In terms of Eskom’s MOI, the Board may consist • Non-executive directors: Dr Tsakani Mthombeni • Ensuring more timely access to external activities of the combined ARC, which was in place of a maximum of 15 directors. The majority of the (chair), Fathima Gany, Clive le Roux, Bheki professional advice and expertise as the existing until February 2025, as well as the activities undertaken Board must be independent non-executive directors, Ntshalintshali and Dr Busisiwe Vilakazi process is very slow and onerous, delaying by the Audit Committee for the remainder of the and there must be at least two executive directors. • Executive directors: Dan Marokane and decision-making year. The Risk Committee held its inaugural meeting During the year under review, the Board comprised Calib Cassim in March 2025 to consider the insurance plan and • Improving the quality of information shared with the 13 directors: 11 independent non-executive directors insurance premium budget for FY2026, as well as Board and its committees. Board members raised and two executive directors. There were no changes The Board delegates authority to these committees the temporary placement of external public liability concerns about voluminous submissions, submissions to the Board’s composition during the year. while retaining overall accountability. The Board insurance for electrical contact incidents. that are not tailored to committees’ areas of reviews and approves the terms of reference of these responsibility, as well as the need to balance the level IR Refer to page 15 for further information on the The Board and its committees regulated their of detail in submissions in some cases committees annually, to define their composition, affairs in compliance with their respective terms of composition of the Board • Lessening the Board’s involvement and time spent mandate, roles and responsibilities. All Board reference and all committees were satisfied that the committees are chaired by independent non-executive on operational matters to focus on strategic matters responsibilities contained therein have been fulfilled directors. When required, the GCE, GCFO and other for the year under review. executive members of management attend committee The Board remains committed to strengthening meetings as officials. internal structures and processes to support its strategic oversight role and ensure that management is During the year, the Board considered and/or capacitated and enabled to deliver on Eskom’s strategy. approved information, opinions, recommendations, reports and statements from its committees, as detailed under the key activities of the respective Board committee reports that follow. 54 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Board and reflecting on its performance continued KEY ACTIVITIES AND DECISIONS • Eskom’s revised Code of Ethics and amendments ASSESSING THE BOARD’S IMPACT OVER To address these challenges, the Board identified DURING FY2025 to the conflict of interest policy regarding related ITS ENTIRE TERM six priority focus areas: party provisions As the Board approached the end of its term on 1. Stabilising the leadership team and strengthening Directorship and attendance • Disposal of the Eskom Finance Company SOC Ltd the leadership pipeline 30 September 2025 (which the shareholder has Number of meetings 12 (EFC) loan book and interests in Nqaba Finance 1 extended to 30 November 2025), it reflected on its 2. Driving the operational turnaround to resolve the (RF) Ltd to African Bank Limited impact over the last three years. This is not only a electricity crisis and thereafter, achieve stability Attendance 98% • Implementation of Eskom's new executive testament to its commitment to good governance and and reliability Chair: Mteto Nyati 12/12 Ayanda Mafuleka 12/12 leadership structure the principles of King IV, but also an opportunity to 3. Securing Eskom’s financial position and prioritising Leslie Mkhabela1 12/12 Dr Tsakani • Generation’s revised strategy, including continued chart the way forward to ensure ethical leadership, the reduction of arrear municipal debt Mthombeni 12/12 operation of coal-fired power stations up to good corporate citizenship and sustainable value FY2030 creation beyond this term. By reflecting on the 4. Implementing the legal separation and positioning Dan Marokane 11/12 Bheki Ntshalintshali 12/12 Board’s role in ensuring that the organisation creates Eskom within the transforming electricity industry • Eskom group’s revised subsidiary governance Calib Cassim 11/12 Tryphosa Ramano 11/12 framework and group parenting strategy in support value over time, it aims to enhance transparency, 5. Fighting crime, fraud and corruption of legal separation identify areas of improvement and reinforce Fathima Gany 12/12 Dr Busisiwe 6. Reconnecting and engaging with stakeholders accountability. Vilakazi 12/12 • Liquidity and cash management agreement with the Lwazi Goqwana 12/12 Dr Claudelle National Transmission Company of South Africa When the Board took over in October 2022, it von Eck 12/12 SOC Ltd (NTCSA) as well as the recapitalisation found a dysfunctional organisation that was facing of NTCSA several systemic challenges which had a profound Clive le Roux 12/12 • Conceptualisation of Eskom’s proposed renewable effect on operations, finances and, ultimately, Eskom’s 1. Appointed as lead independent director from 31 January 2025. energy company and next steps to accelerate sustainability. renewable energy participation The Board considered and/or approved the following • Review of progress and priority matters related to key matters, many of which were considered and the legal separation programme recommended by its committees: • Separation of the Audit and Risk Committee into • Group annual financial statements, prepared on a two distinct committees going concern basis, together with the integrated • Eskom’s Corporate Plan for FY2026 to FY2030, report and sustainability report including the proposed shareholder compact for • Group interim financial statements, prepared on a FY2026 going concern basis Operations Finance Sustainability • Review of progress on initiatives to address Eskom’s audit findings • Unreliable plant resulting in • Weak balance sheet due to • Outdated vertically • Proposed risk appetite and tolerance statements poor performance high debt burden integrated business model for FY2025 and FY2026 • Grid constraints to connect • Tariff not reflective of costs • The need to transition into • Conclusion of the shareholder compact for FY2025 additional capacity • Revenue pressure – clean energy • Quarterly shareholder reports submitted to the • Dysfunctional organisational non-payment and • Prevalent crime, fraud and shareholder, covering Eskom’s performance against culture declining sales corruption the shareholder compact • Lack of adherence to internal • Board Charter and revised terms of reference for controls and ineffective the Board’s committees combined assurance • Board evaluation report, a summary of which is covered under “Annual board evaluation for FY2024” earlier in this section • Amendments to Eskom’s MOI to authorise the shareholder to appoint a LID and recommendation of Leslie Mkhabela for the role 55 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Board and reflecting on its performance continued Key developments and contributions made in turning performance around and steering Eskom towards stability and growth over the Board’s three-year term Future focus areas are reflected alongside. The Board aims to sustain this • Fast track implementation of the legal separation positive momentum and ensure that the organisation • Diligent implementation of the clean energy strategy remains resilient and competitive in the ever-evolving • Resolve the municipal debt challenge with business and energy landscapes. Government • Address inadequate tariff path and tariff uncertainty The overview that follows will cover the key Challenging landscape operational, financial and sustainability-related • Continue to build the envisioned high-performance, • Frequent loadshedding, peaking at ethical culture interventions and achievements by the Board’s stage 6 • Pipeline future skills and appropriate utilisation of supported by its committees during its term, together with the future focus areas that are fundamental to • Weak balance sheet and loss- emerging technologies ensuring Eskom’s continued success. making financial position • Customer-centricity and retention of market share • Escalating municipal debt Further leadership in evolving electricity industry • Governance breaches, including instability and negative • Sustained increase in EAF and reduction in energy state capture media attention losses • Outdated business model following high-profile executive resignations • Poor reputation • Negative outlook by lenders and rating agencies • Low staff morale, with skill gaps and GCE appointed leadership instability Sustainable power Future for a better future Mar Feb 2024 Sep 2023 2022 Jun Jul 2025 Apr 2024 Oct 2023 2022 Eskom turnaround delivers NTCSA trading positive impact • Revised Eskom’s • Loadshedding reduced to 13 days strategy in FY2025 Board appointed • Generation Recovery • Return to profitability Identified priority focus Plan with a stronger areas and reviewed • Credit rating upgrades focus on EAF recovery committee structures • Exco restructured and capacitated • GE: Generation to deliver Eskom’s strategy appointed • Structural reforms and interventions • Eskom Debt Relief to root out crime, fraud and Act passed corruption • Improved stakeholder sentiment 56 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Board and reflecting on its performance continued OPERATIONAL RECOVERY executive team. A revised Exco structure was governance oversight of these functions. Internal monitored regularly, as well as matters referred to BUSINESS OPERATIONS PERFORMANCE established and has been fully capacitated through Audit’s capability and performance have been law enforcement agencies. Cyber-security efforts COMMITTEE the appointment of seasoned executives to drive improved through amendments to the Internal Audit have also yielded strong results, with the prevention When its term commenced, the Board reviewed operational excellence and lay a solid foundation for Charter and ongoing departmental evaluations, of malicious attempts and ransomware attacks on the structure of its committees and established future growth. Furthermore, executive leadership although resourcing remains a constraint. The Board Eskom’s systems. Efforts to strengthen Eskom’s cyber- BOPC to enable more focused oversight of technical positions at subsidiaries have been filled to reinforce has encouraged rigorous challenging of weaknesses in security and information technology are ongoing, performance, with a strong focus on supporting the critical operational areas. the internal control environment through combined together with implementation of a cloud adoption successful development and implementation of the assurance activities. Reporting structures, systems, strategy and data strategy. Additionally, the combined Generation Recovery Plan that was geared towards The leadership development unit was re-established controls, resources, policies and procedures continue information technology and operational technology EAF recovery. This led to a substantial improvement as the Dr RJ Khoza Leadership Development to be enhanced to address significant internal control portfolio has improved strategic responsiveness. in EAF to 60.60% and 310 consecutive days without Centre within the Eskom Academy of Learning to deficiencies. loadshedding, marking a notable turnaround in enhance leadership capabilities and strengthen the Collectively, these efforts have enhanced Eskom’s generation plant reliability. leadership pipeline through succession planning and Significant focus has been placed on addressing the response to crime, fraud and corruption, while better talent management programmes. A skills assessment shortcomings in compliance with legal and regulatory positioning the organisation to strengthen its internal Substantial generation capacity has been restored, was undertaken to enhance skills and capabilities requirements, particularly relating to the accuracy and control environment and improve on its future audit with over 5GW brought online through critical across the group at all levels and develop a future- completeness of information required by the PFMA. outcomes. projects at Kusile, Medupi and Koeberg, together fit, productive and adaptable organisation. The An audit recovery programme was launched towards with a revised strategy for continued operation of Board and Exco regularly hosted engagements with the end of FY2025 to strengthen internal controls, INVESTMENT AND FINANCE COMMITTEE coal-fired power stations to improve security of executives and employees to ensure alignment with enhance audit readiness, improve audit outcomes and Government debt relief support provided through the supply. Key regulatory advancements, such as the Eskom’s strategic direction. Additional initiatives have publish financial results within legislated timeframes in Eskom Debt Relief Act, 2023 has assisted in meeting approval of new curtailment and interim grid capacity focused on ethics, fraud awareness and whistleblower years to come. Eskom’s debt servicing obligations, freeing up liquidity allocation rules, have unlocked an additional 3.5GW support, contributing to a more transparent and for operating requirements and long-term planning. in grid capacity, facilitating integration of new supply. accountable environment. Oversight of the risk management process was The Board has regularly monitored compliance with The organisation has made progress in capacitating strengthened, with each Board committee assigned the conditions attached to the support to ensure the the grid, installing 367km of new transmission lines Review of the human capital strategy has been responsibility for overseeing specific risks relevant equity conversion of all amounts received to date. and 2 643MVA of transformer capacity through a strategic priority of the Board. Changes to the to their respective areas of focus. Efforts to combat remuneration strategy and culture transformation risks related to crime, fraud and corruption have Capital allocations have been optimised to address the Transmission Development Plan (TDP) since critical projects and programmes and support Eskom’s FY2023, and also achieving 197 831 new electrification programmes were aimed at positioning Eskom as been enhanced through revised ethics management an employer of choice by tailoring rewards and strategies, implementation of a fraud prevention plan transition within the evolving energy landscape. connections since then. Financial plans and borrowing programmes are recognition practices to attract and retain talent. This and strengthened partnerships with law enforcement Initiatives are underway to improve revenue collection was supported by the reinstatement of executive and agencies. Eskom’s multiple investigative functions focused on ensuring Eskom’s long-term sustainability. and address energy losses, including the rollout of smart employee incentive schemes and talent boards, as were consolidated into a newly established Group The committee has also monitored the meters and the replacement of Eskom’s online vending well as the reintroduction of Manager and Chairman Investigations and Security Department, supported implementation of National Treasury’s municipal debt system, which are both in progress. In the interim, the awards for recognition of high performers. Employee by a Project Management Office and Rapid Response relief programme and other interventions to resolve Key Revision Number (KRN) 2 rollover project has attrition rates have declined since FY2023. Eskom Unit to accelerate investigations and consequence the poor payment levels of municipalities. Debt write- enabled Eskom to reduce the number of zero buyers. was also recognised as a Top Employer in South management processes. War rooms were also offs have been processed for the small number of Digitalisation and automation projects have also been Africa by the global Top Employers Institute in established to address specific matters, including municipalities that have complied with the conditions adopted to enhance operational efficiency. Eskom has FY2025, reflecting enhanced employee satisfaction prepaid meter token fraud and the internal breach of of the programme. To address non-compliance by been positioned on a clearer path toward operational and retention. Efforts to foster a diverse and inclusive Eskom’s financial accounting system. municipalities, Eskom has issued breach notifications resilience and future growth, supported by ongoing workplace, particularly for women and people with and proposed alternative solutions for Government investments in infrastructure and technology. disabilities, remain ongoing and central to Eskom’s IR F or further detail, refer to “Fighting crime, fraud and to consider. Active partnering and the implementation human capital strategy. corruption” from page 75 HUMAN CAPITAL AND REMUNERATION of distribution agency agreements have been pursued, FINANCIAL RECOVERY particularly with the top defaulting municipalities. The COMMITTEE Proactive security interventions have resulted in Board acknowledges that more stringent interventions The Board has focused on the appointment of AUDIT AND RISK COMMITTEE (NOW AUDIT a reduction in crime-related incidents and crime- are required, and addressing the challenge of non- competent and ethical leaders to drive a high- COMMITTEE) A key advancement was the restructuring of the related losses affecting the organisation, coupled with payment by customers across all categories remains a performance, ethical culture. An extensive Assurance and Forensics Department into separate an increase in arrests. Legal matters and forensic critical future focus area. recruitment process was undertaken to appoint an ethical and highly competent GCE to lead Eskom’s Internal Audit and Forensics departments to enhance investigations undertaken by external firms are 57 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Board and reflecting on its performance continued New tariff structures, as well as net metering for market codes and an energy trading platform CHARTING THE COURSE FOR THE consequence management. The Board is overseeing self-generating households and cross-border pricing are in development. The progress on unbundling FUTURE the transformation of Eskom’s high-performance, methodologies, have been introduced to support was supported by the adoption of a revised legal The Board will continue to drive operational ethical culture, as well as the fraud prevention plan, the revenue sustainability. The migration towards a separation strategy, to respond to the changing excellence, with a sustained increase in EAF and organisation’s security posture and the audit recovery more appropriate tariff path, while considering the market landscape and emerging risks, as well as a focused shift to turning around distribution programme, each of which is critical to sustaining the affordability of customers and safeguarding vulnerable new business and operating models for NTCSA, performance. Key initiatives will target the reduction positive momentum achieved so far. sectors, has been a key priority for turning around Generation and Distribution. of energy losses and expansion of the customer financial performance. Eskom has lodged several To support market certainty and facilitate long-term base through improved service delivery and the planning requirements of electricity suppliers and review applications with the courts to challenge To accelerate Eskom’s participation in the green introduction of new products and services. customers, Eskom will engage with NERSA and NERSA’s revenue determinations and improve economy, a Renewables Unit was established as the first step towards setting up a separate renewable The organisation will intensify efforts to improve other stakeholders on a long-term tariff outlook. The Eskom’s financial sustainability. energy subsidiary. The organisation is focused on revenue recovery by prioritising the rollout of smart organisation will continue to pursue modernised tariff A Cost Optimisation and Revenue Enhancement developing a balanced and diversified energy mix. structures to better address the cost reflectivity of the meters and the replacement of Eskom’s online vending (CORE) programme has been established to reduce To this end, the Board has approved a clean energy generation, transmission and distribution components system, as well as targeting the reduction of zero costs through operational efficiencies and to deliver project pipeline of 5.9GW, supported by several of electricity supply through fixed and variable charges, buyers and enforcing disconnection of and penalties sustainable revenue growth. The Board has also partnerships. Eskom has also concluded socio- which balance affordability with Eskom’s financial for non-compliant customers. The TDP will be concluded an agreement for the disposal of Eskom economic impact assessments for 10 power stations sustainability. Delivery against CORE savings targets are accelerated by leveraging partnerships and finalising Finance Company SOC Ltd, with sale of the loan and decoupled the Just Energy Transition (JET) being prioritised, alongside the development of new grid allocation rules to catalyse transformation within book and related interests underway, subject to strategy from planned station shutdowns to maintain revenue streams and international sales strategies, to the electricity supply industry. regulatory processes. security of supply during the energy transition. further bolster financial performance. Collaboration with Government remains a key focus To enable market reforms, the Board-approved Overall, substantial progress has been made in SOCIAL, ETHICS AND SUSTAINABILITY to address ongoing municipal payment challenges. achieving financial stability, with Eskom recording the approach to establish the Transmission System COMMITTEE Engagements are underway to reform the electricity Operator (TSO) will be implemented. Resolving first profit since FY2017. Key financial metrics have Significant strides have been made in reinforcing distribution industry to address legacy challenges and the financial sustainability of NEDCSA is necessary improved considerably over the term of the Board, ethical and sustainable practices across the group. An to consider other strategic responses, including the to deliver on Government’s Roadmap for legal resulting in credit rating upgrades and a more positive independent ethics risk assessment was conducted mandatory implementation of distribution agency separation. The legal separation strategy has been outlook from rating agencies. to proactively identify and address potential ethics- agreements and transitioning municipalities that are revised in response to the Electricity Regulation related risks. This led to updates to key ethics-related failing to settle their current accounts to prepaid or Amendment Act and is being prioritised to enable SUSTAINABILITY policies as well as the adoption of an ethics manifesto credit-limited electricity supply agreements. GOVERNANCE AND STRATEGY COMMITTEE the establishment of an independent TSO, separation by the Board. The ethics management strategy was of the distribution business and the establishment of Governance enhancements have been prioritised to revised to further strengthen governance standards. Leadership development remains a critical priority, a new holding company to facilitate the separation enhance accountability and strategic alignment across the with a focus on building a sustainable pipeline through of the generation business. A renewables subsidiary, group. This includes the strengthening of the subsidiary ESG practices are being embedded throughout tailored executive programmes led by the newly Eskom Green, will be established to attract private governance framework, development of a subsidiary operations. Key interventions include the development established Dr RJ Khoza Leadership Development investment and execute on the clean energy pipeline. parenting strategy and proposals for the appointment of Eskom’s ESG framework, independent review of Centre. Additionally, alignment of strategic objectives of independent non-executive directors at subsidiaries. remediation programmes and environmental risk across the group will be reinforced by optimising the The appointment of independent non-executive To strengthen governance oversight, lead independent assessments. Additionally, the committee has enhanced performance management system and instituting directors across all subsidiaries is crucial for enhancing directors were appointed at Eskom and NTCSA. The oversight of human capital sustainability, health and rigorous target setting, ensuring that individual governance oversight in line with Eskom’s subsidiary Board has reviewed the organisational culture strategy safety, as well as supplier development, localisation and and collective performance translates into tangible parenting strategy. and performance management framework to support industrialisation initiatives. organisational impact. Eskom’s turnaround. The Board has made significant progress in Eskom’s stakeholder engagement plan has focused Digital technologies are being introduced to strengthen turning around Eskom, achieving key milestones in Significant progress has been made in aligning on strengthening relationships with key stakeholders governance, cyber-security, compliance and internal operations, finances and, ultimately, Eskom’s overall Eskom’s structure and operations with the demands through strategic partnerships, proactive engagements controls, as well as streamline service delivery and sustainability. Looking to the future under the next of the evolving electricity supply industry. The legal and inclusive dialogues. The turnaround has restored procurement processes. In addition, efforts are Board, the focus will shift to sustaining and building separation process has been advanced significantly, public trust, stakeholder sentiment and, ultimately, underway to accelerate the resolution of forensic cases on these achievements to ensure Eskom’s continued with NTCSA commencing trade from 1 July 2024; Eskom’s reputation. and monitor interventions to prevent crime, fraud success and competitiveness in the evolving and corruption and the implementation of effective electricity supply industry. 58 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Audit Committee (formerly the Audit and Risk Committee) for the year ended 31 March 2025 Membership and attendance • Acting as the statutory audit committee for Eskom’s • Group interim financial statements, including wholly owned subsidiaries, except for Escap SOC feedback from the external auditor’s review  efer to the report of the Audit Committee in the AFS R Number of meetings 1 13 annual financial statements for further information on Ltd, Nqaba Finance 1 (RF) Ltd and NTCSA, which • External audit oversight strategy and audit plan significant matters relating to the audit, internal controls, Attendance 95% have their own audit committees. The Audit • Progress on the implementation of Eskom’s audit risk and reporting considered by the committee Chair: Fathima Gany 13/13 Committee reviews the activities of the subsidiary recovery programme to track and close audit findings audit committees in line with Eskom’s subsidiary Ayanda Mafuleka 11/13 • Update on forensic matters, including investigations governance framework. The chair of the Audit FUTURE FOCUS AREAS undertaken by the Special Investigating Unit and Leslie Mkhabela 12/13 Committee is a standing invitee to the subsidiaries' Focus areas for the coming year include: external service providers Dr Busisiwe Vilakazi 13/13 audit committee meetings • Monitoring liquidity and sustainability risk relating to • Feedback on the strengthening of the information Dr Claudelle von Eck 13/13 technology and operational technology environments financial reporting, Eskom’s status as a going concern, Following the Board’s approval of the separation as well as efforts to improve the income statement of ARC in February 2025, the Risk Committee is • Oversight of the war rooms established to address 1. In addition to the committee meetings disclosed above, the and strengthen the balance sheet committee met regularly with the external auditors, law responsible for oversight of the risk management Eskom’s compromised online vending system enforcement agencies as well as external service providers system, ensuring that material risks and opportunities initially reported in FY2024 as well as the internal • Evaluating the effectiveness of the finance function, conducting forensic investigations. Furthermore, frequent that could affect the group are identified, evaluated, breach of Eskom’s financial accounting system compliance management and the internal control engagements were held with management on the progress of the external audit. effectively managed and reported. The Audit which impacted the FY2025 year end audit. environment Committee is responsible for the governance of risks Further information on these matters is disclosed • Considering the structure of the internal audit Representation at year end function across the group and opportunities specifically related to financial in “Conclusion on assurance and controls – Audit 1 management and reporting. Committee conclusions” that follows on page 61 • Overseeing the enhancement of the capacity and • Status of the Eskom Pension and Provident Funds’ capability of the finance function, including specialist KEY ACTIVITIES DURING THE YEAR surplus skills and integration with other functions 2 The committee considered the following and, where • Monitoring the organisation’s effectiveness in Equity Age • Internal audit and combined assurance plans required, recommended matters for noting or implementing recommendations from forensic • Review of the organisational structures of the 3 approval by the Board: findings, including consequence management and Group Finance Division, the Internal Audit • Group annual financial statements, integrated resolving root causes to ensure that contraventions 4 Department as well as the newly established Group report, subsidiary annual financial statements and are appropriately addressed and prevent recurrence Investigations and Security (GIS) Department ACI female ACI male 40–49 50–59 related documents, including the report of the Audit • Assessing Eskom’s capacity and capability to combat • Quarterly shareholder reports covering the Eskom Committee, the external audit opinion, the going crime, fraud and corruption through the newly group’s performance against the shareholder Committee’s focus Composition concern and impairment assessments, the status established GIS Department compact and other strategic matters for the of reportable irregularities and the management • Monitoring progress on Eskom’s legal separation and Financial capital 5 members shareholder’s attention, such as compliance with representation letter to the external auditors compliance with Government’s debt relief conditions Human capital 100% independent non- Government’s debt relief conditions, which were executive directors • Feedback from the external auditors, key audit • Overseeing Eskom’s fraud prevention plan and Intellectual capital submitted to the shareholder and National Treasury matters, the external audit opinion and audit fees initiatives to address matters identified through GCE and GCFO attend by • Progress on Eskom’s municipal debt management invitation as officials • Oversight of Eskom’s reportable irregularities, both internal and external processes, including ghost initiatives, including the municipal debt relief The Chief Audit Executive including those relating to matters under the vending and procurement irregularities programme and external auditors attend purview of other Board committees • Exercising ongoing oversight of information by invitation • The combined assurance annual status report The committee provided oversight and regularly technology and operational technology • Eskom’s King IV application register considered reports on areas such as internal audit management related to financial reporting, internal • Amendments to the Internal Audit Charter and combined assurance activities; Eskom’s fraud control and cyber-security PURPOSE prevention plan and forensic investigations; the risk • External quality assessment of the Internal Audit • Monitoring of combined assurance, including The committee’s roles and responsibilities include: landscape and Priority 1 risks; information technology Department in accordance with International overseeing the internal audit function and the • Executing the statutory functions of an audit governance and performance; PFMA compliance; as external audit process, as well as the audit recovery Standards for the Professional Practice of Internal committee set out in the Companies Act, 2008 well as litigation and other significant legal matters. The programme Auditing (subsequently concluded in June 2025) and the PFMA, 1999 committee also held several in-committee meetings • Readiness and impact assessment on the new • Overseeing the preparation of the annual financial • Overseeing internal audit and forensic functions, to deliberate on confidential and sensitive matters, Global Internal Audit Standards (subsequently statements of Eskom and its subsidiaries and the combined assurance and external audit activities, including those relating to crime, fraud and corruption. adopted by the Internal Audit Department in integrated report for the Eskom group financial and non-financial reporting, internal April 2025) control systems, as well as compliance management 59 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Conclusion on assurance and controls The Audit Committee and Risk Committee set INTERNAL ASSESSMENT OF CONTROL ENVIRONMENT EXTERNAL AUDIT OPINION the direction and provide oversight on assurance, On a quarterly basis, the Internal Audit Department reports on the status of governance, compliance and the The independent auditors, Deloitte & Touche, issued forensics, risk management, controls, compliance and adequacy and effectiveness of preventative and corrective controls. Based on the findings from the audits planned a qualified opinion relating to the quantification and the governance of information technology across the and completed during FY2025, Eskom’s Internal Audit Department has concluded the following: disclosure of certain information required in terms of organisation in accordance with the related principles the PFMA, 1999. Except for this qualification, Eskom’s of King IV. Governance Internal controls financial statements are considered to be fairly presented in terms of IFRS Accounting Standards. Furthermore, On an annual basis, the Audit Committee approves Leadership remains committed to Eskom’s The design of the internal control system is generally the independent auditors have highlighted several the charter of the Internal Audit Department, turnaround plan to recover operations, improve adequate, providing a structured framework matters in their report. One of these concerns a material together with a risk-based audit plan and fraud financial performance, strengthen the balance to support governance, risk management, and uncertainty relating to Eskom’s ability to continue as prevention plan. The Internal Audit Department sheet, achieve legal separation of the three licensed operational efficiency, although the effective a going concern, which is due to its dependence on represented by the Chief Audit Executive, Ureka businesses and transform the organisational culture. application of controls requires ongoing Government support, uncertainties related to the Rangasamy, reports functionally to the Audit Board initiatives to enhance systems, controls, improvement from management. Internal audit achievement of operational assumptions and the Committee and maintains independence from resources, policies, procedures and reporting has identified control deficiencies relating to plant determination of regulated revenue by NERSA, as well executive management by determining the scope of structures are in progress, but not yet fully effective. and asset maintenance, supply chain management, as the financial risk associated with municipal arrear debt internal audits and assurance projects, performing contract governance, sustainability management, and energy losses. However, these matters do not affect assurance work and communicating results free from Overall, Eskom’s governance framework – legal and regulatory compliance and broader including subsidiary governance – remains an their opinion. interference. operational processes. Root causes identified area for improvement, with compliance with include inadequate adherence by employees to An internal breach of Eskom’s financial accounting system The Internal Audit Department facilitates and key laws and regulations requiring attention, well-established processes, policies and procedures, during the period limited the ability of the independent coordinates the execution of combined assurance particularly compliance with the PFMA, 1999. A deliberate circumvention of controls and insufficient auditors to place reliance on general IT controls of activities. Our combined assurance model covers revised subsidiary governance framework is being management oversight Eskom’s financial accounting system, increasing the risk supervision and oversight from line management; implemented to enhance reporting mechanisms and of material misstatement due to fraud or error and specialised risk, control and compliance functions; governance practices across the group resulting in the need for manual testing of controls and a combination of internal and external assurance; additional substantive procedures. The independent Risk management Financial controls and, ultimately, oversight by the Audit Committee auditors also needed to assess the effectiveness of and the Board. This approach seeks to enable an The design of the risk management system for The design of the internal financial control system cyber-security endpoint protection as well as the effective control environment, to provide reasonable identifying, managing and reporting on risks is generally is adequate to support financial governance, risk impact of potential vulnerabilities in certain operational assurance and support the accuracy and integrity of adequate, although internal audit has identified issues management and regulatory compliance, although technologies on their audit opinion. The independent information used for decision-making and reporting to that may pose challenges to the achievement of the effective application of controls requires ongoing auditors were satisfied that the audit procedures business objectives. The system of control related oversight to mitigate financial risks and enhance performed were sufficient to mitigate the audit risks stakeholders. to compliance is partially effective. Addressing these operational reliability. Internal Audit has identified arising from the internal IT breach. areas is critical for ensuring appropriate risk mitigation control weaknesses in certain areas that may affect and long-term sustainability financial accuracy, reporting integrity and regulatory AFS Refer to the independent auditor’s report in the adherence annual financial statements for further information 60 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Conclusion on assurance and controls continued AUDIT COMMITTEE CONCLUSIONS the root causes, immediate actions taken as well as and role clarity under a functional leadership management to eliminate the existing risk, including During the year, the Audit Committee considered recommendations to avoid recurrence. The committee business model, as well as improved accountability, accelerating the rollout of smart meters and acquiring information, insights and explanations provided by will continue to do so until matters are satisfactorily financial control, review and reporting at component new software to replace the existing system, while management, experts, the internal audit and forensic progressed. The monitoring of the implementation and subsidiary level due to the dependency on the incorporating lessons learnt to ensure robust controls functions as well as discussions with the independent and continuous adherence to processes, policies and group finance function for assistance. are in place around access control, configuration auditors. The committee encouraged rigorous procedures, together with addressing insufficient management, backups and reconciliations. The challenging of control, accounting, disclosure matters management oversight, remain focus areas. Overall, the committee concluded that the committee noted that consequence management and compliance to legislation in carrying out its compensating measures in place to combat any has been implemented for those employees found functions and when concluding on key issues. The committee concluded that the design of the identified breakdown in the system of internal financial guilty based on the investigations completed to date, internal control system is generally adequate, although controls are adequate to provide a reasonable basis although the scope of the investigations has been The committee noted the continuing breakdown in the effective application of controls requires ongoing for the preparation of Eskom’s financial statements. extended and is ongoing. internal controls over financial reporting, including improvement from management. The combined Necessary enhancements are, however, required to inadequate review and monitoring of reporting assurance model requires enhancement in the internal ensure controls operate effectively. Furthermore, the committee assessed the ability of processes at component and subsidiary level, together monitoring and assessment of the execution of the company and the group to continue to operate with weaknesses in the adherence to internal controls controls to proactively address the circumvention of The enhancement of systems, controls, resources, as a going concern in the foreseeable future, by involving contract and supply chain management, controls, prevent recurrence of findings and improve reporting structures, policies and procedures and considering liquidity based on the latest cash flow operational and capital projects, inventory, sustainability the functioning of business processes. Consequence consequence management remain key focus areas to forecasts and stress-tested scenarios for a 12-month indicators, plant management as well as legal and management needs to be improved to address non- address crime, fraud and corruption. The committee period after signoff of the financial statements. regulatory compliance. Inadequacies in general and compliance with well-documented processes, policies acknowledged the progress made in forensic security controls over information and operational and procedures. investigations, legal matters and other internal and The committee acknowledged that there are various technology require remedial action and improvement. external investigations but noted that Eskom is still dependencies and material uncertainties that may cast The committee continued to place significant focus dependent on law enforcement agencies and the significant doubt on the going concern assessment, The committee acknowledged that significant on addressing the shortcomings in compliance with justice system for timeous arrests and convictions. including whether the plans to address the risks shortcomings and internal control deficiencies were legal and regulatory requirements, particularly relating The committee made recommendations and to manage the going concern will materialise as identified by the independent auditors and the Auditor- to the accuracy and completeness of information monitored the interventions implemented to address anticipated. The group continues to face long-term General of South Africa. The audit recovery programme, required by the PFMA. Reporting structures, systems, crime, fraud and corruption during the year. financial sustainability challenges relating to the tariff which aims to build finance capacity and capability, controls, resources, policies and procedures continue path and structure; operational inefficiencies and strengthen internal controls and track progress against to be enhanced to address the significant internal  efer to “Fighting crime, fraud and corruption – IR R above-inflationary cost increases in some areas; losses internal and external audit findings, is targeting improved control deficiencies in the PFMA reporting process. Strengthening Eskom’s response to unlawful associated with criminal and fraudulent activities audit outcomes over the next three years. The audit recovery programme will improve the behaviour” for further information (including loss of revenue from illegal electricity PFMA control environment in future years, although it connections and illicit prepaid electricity tokens); will not address all historical deficiencies. high debt service costs; escalating arrear municipal IR Refer to “Upholding good governance – Audit The committee considered financial and control risks and metro debt; as well as liquidity pressure from recovery programme” for further information Furthermore, the committee considered the related to information technology and operational the continued focus on addressing generation plant appropriateness of the expertise and experience of technology, including feedback on the progress of performance and expanding network infrastructure. The committee acknowledged management’s the GCFO as well as the capacity and capability of the the war room established to investigate and oversee efforts to remedy identified weaknesses and the finance function. The committee also considered the the implementation of corrective and enhanced The committee concluded that there is a reasonable improvement in certain areas but is concerned that expertise, resources and experience of the Internal preventative measures due to the breakdown in the expectation that the material uncertainties affecting the internal control environment has not improved Audit department, including the Chief Audit Executive. IT control environment following an internal breach of Eskom’s going concern will be satisfactorily addressed by significantly, with matters not being addressed at the The committee noted the need for additional Eskom’s financial accounting system. The committee the mitigation strategies in place because of adequate rate required to reduce the risk exposure to Eskom. resources and enhancement of specialist skills in the also considered enhancements made to endpoint access to resources and the continued financial support As a result, the committee had to once again place finance, process control and assurance, internal audit security protection and the progress of the OVS war from Government. Consequently, the committee higher reliance on the work of external assurance and forensics functions to address shortcomings. room on the investigation, interventions, control recommended to the Board that the adoption of the providers. This remains a key risk to attaining an enhancements and measures to reduce and mitigate going concern basis of accounting is appropriate. The committee acknowledged the need for specialist the growth of illicit prepaid electricity token creation. unqualified audit outcome in the future. functions to integrate, such as those with expertise in IFRS Accounting Standards and corporate legal, The committee noted that the measures to strengthen AFS Refer to the report of the Audit Committee and The committee implemented processes to actively particularly in the execution of corporate finance note 3.2 in the annual financial statements for oversee and monitor the progress on audit findings the OVS environment are ongoing and were not yet further information raised by internal and external assurance service transactions. The committee also noted the need completely effective. The committee recommended providers, including management’s assessment of for improved and aligned finance business partnering a two-pronged approach for implementation by 61 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Business Operations Performance Committee (BOPC) for the year ended 31 March 2025 Membership and attendance PURPOSE KEY ACTIVITIES DURING THE YEAR FUTURE FOCUS AREAS The committee’s responsibilities include: The committee considered the following and, where Focus areas for the coming year include: Number of meetings 8 • Monitoring Eskom’s technical performance and required, recommended matters for noting or • Overseeing the Generation Recovery Plan and Attendance 85% operational issues, including safety, security, approval by the Board: outage management programme for the short, health, environmental and insurance matters not • Operational performance across Generation, medium and long term Chair: Clive le Roux 7/8 addressed by the Social, Ethics and Sustainability NTCSA and Distribution, including priority risks • Reviewing the adequacy of the system for the Lwazi Goqwana 7/8 Committee and progress on the Generation Recovery Plan upcoming winter and summer periods Ayanda Mafuleka 6/8 • Assessing the adequacy of electricity supply and • Review of the adequacy of the system to supply • Enhancing the reliability of coal-fired power progress against targets related to electricity forecasted demand, including the winter outlook stations, with a focus on unit trip reduction, outage Dr Tsakani Mthombeni 7/8 production and supply set out in the shareholder (from May to August 2024) and summer outlook preparation and execution, as well as spare parts Tryphosa Ramano 6/8 compact and Corporate Plan (from September 2024 to March 2025) availability Dr Busisiwe Vilakazi 8/8 • Overseeing coal, nuclear and renewable primary • Feedback on fourth-quarter loadshedding events • Developing leading indicators for Generation energy sources • Extension of the Emergency Generation Programme performance reporting • Evaluating progress achieved through strategic • Plans and technology considerations for • Reviewing technical performance and operational Representation at year end production and operational initiatives, including Generation’s coal automation system project issues, including production issues, customer 1 1 proposed changes to measures reported in • Strategy and business case for future control and service issues, related corporate procedures, as the Operational Health Dashboard and other instrumentation lifecycle management well as safety, security, health, environmental and operational reports, as well as outcomes from insurance matters • Technology considerations and loadshedding risks 1 major technical investigations and technical audits • Monitoring progress against production and supply Equity Age relating to the Minimum Emissions Standards 3 • Providing guidance on production and operational targets in the shareholder compact and Corporate 4 • Feedback on Eskom’s barcoding project for risks as well as the appropriateness of mitigation Plan 2 enhanced automation in the identification of spare plans, including stakeholder feedback and public • Overseeing coal, nuclear and renewable primary parts and materials in stores, as well as initiatives to communication plans energy supplies ACI female ACI male 40–49 50–59 60+ resolve spares-related challenges in Generation White male • Review of the progress of Eskom’s JET projects • Considering Generation’s role in new clean energy • Consolidated feedback on Eskom’s water initiatives management • Monitoring the implementation of the TDP by Committee’s focus Composition NTCSA • Update on the Lesotho Highlands Water project Manufactured capital 6 members • Overseeing Distribution’s operational performance, • Review of Eskom’s cyber and information security Natural capital 100% independent non- including the implementation of technology and Human capital executive directors • The status of Eskom’s five-year rolling capital initiatives to reduce energy losses GCE and GCFO attend by investment plan as well as updates on major projects Intellectual capital • Providing guidance and assurance on production Social and invitation as officials • Review of technical aspects included in the internal and operational risks, including the adequacy of relationship capital audit catalyst and forensic catalyst reports mitigation measures • Regularly considering proposed changes to measures reported in the Operational Health Dashboard, other operational reports and any other operational indices • Regularly reviewing findings and the implementation of recommendations from major technical investigations and technical audits 62 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Governance and Strategy Committee (GSC) for the year ended 31 March 2025 Membership and attendance PURPOSE KEY ACTIVITIES DURING THE YEAR FUTURE FOCUS AREAS The committee’s responsibilities include: The committee considered the following and, where Focus areas for the coming year include: Number of meetings 10 • Overseeing implementation of Government required, recommended matters for noting or • Overseeing the implementation of Eskom’s Attendance 97% directives, roadmaps and policy documents related approval by the Board: turnaround plan, with a focus on addressing the to the restructuring of Eskom and the electricity • Update on the organisational culture strategy to national energy crisis Chair: Mteto Nyati 10/10 supply industry support Eskom’s turnaround • Supporting the President’s Energy Action Fathima Gany 10/10 • Recommending Eskom’s long-term strategy and • Recommendations for filling non-executive director Plan and collaborating with the Minister of Clive le Roux 10/10 restructuring initiatives to the Board vacancies, including nominations to the Board and Electricity and Energy, NECOM and the National • Monitoring implementation of Eskom’s strategy and shareholder Joint Operational and Intelligence Structure Dr Tsakani Mthombeni1 0/0 (NATJOINTS) recovery plans • The revised subsidiary governance framework for Bheki Ntshalintshali 10/10 • Ensuring strategic alignment between Eskom the Eskom group • Monitoring progress against key milestones Tryphosa Ramano 8/10 and its subsidiaries, including the future roles of • NTCSA shareholder compact and Corporate Plan of Eskom’s legal separation, including the Generation, NTCSA and Distribution for FY2025 corporatisation of NEDCSA and establishment of a Dr Claudelle von Eck 10/10 new holdings company • Recommending and driving key stakeholder actions • Appointment of subsidiary board members, to support Eskom’s financial sustainability, including including the CEO of Escap SOC Ltd and interim • Executing an effective parenting strategy for the 1. Appointed as a member of GSC following the Board’s Eskom group approval of the separation of the Audit and Risk Committee initiatives to strengthen the balance sheet CEO of Eskom Rotek Industries SOC Ltd in February 2025 and appointment as chair of the newly • Evaluating the Board’s size, composition, • Review of the performance compacting structure • Accelerating Eskom’s investment in renewable established Risk Committee. qualifications, skills, experience and diversity for the GCE and executives energy initiatives and making recommendations to the Board and • Strategic focus areas from the Board and Exco • Supporting the shareholder in executing Eskom’s Representation at year end shareholder strategy workshop, particularly relating to Board succession plan 1 • Overseeing the annual evaluation of the Board, Generation, NTCSA and Distribution • Strengthening Eskom’s balance sheet, with a 2 its committees and subsidiary boards and making • Eskom’s corporate strategy, strategic planning particular focus on addressing arrear municipal debt recommendations to the Board on the structure of process and the shareholder compact for FY2026 its committees and the appointment of directors to • Update on the future business models for 3 Age Equity 3 subsidiary boards Distribution and Generation • Feedback on lessons learned from the legal 3 separation of NTCSA 2 • Review of progress on the legal separation of ACI female ACI male 40–49 50–59 60+ Distribution and Generation, as well as the White male establishment of a new holdings company • Proposed amendments to the Distribution legal Committee’s focus Composition separation timeline and merger agreement Financial capital 7 members, comprising the • Feedback on alternate funding mechanisms for Manufactured capital chairs of each of the Board’s Eskom’s JET projects Natural capital committee • Progress on National Treasury’s debt relief and Human capital 100% independent non- executive directors Eskom’s compliance with the debt relief conditions Social and relationship capital GCE and GCFO attend by invitation as officials 63 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Human Capital and Remuneration Committee (HCR) for the year ended 31 March 2025 • Reviewing and making recommendations to the • Eskom’s skill assessment for current and future • Supporting initiatives to improve employee morale Membership and attendance Board on Eskom’s organisational structure business needs and monitoring progress on culture transformation Number of meetings 11 • Overseeing the development and implementation • Quarterly human capital performance reports, at executive level Attendance 98% of remuneration policies aligned with Government covering workforce analytics, labour relations, • Promoting a speak-up culture through whistle- guidelines, the Board’s strategic direction health and wellness, employee benefit costs and blower awareness, protection and support, and Chair: Dr Claudelle von Eck 11/11 and King IV principles of fair, responsible and organisational effectiveness fostering a psychologically safe environment for Fathima Gany 11/11 transparent remuneration • Feedback on performance against ethics-related employees to escalate bad news to enable faster • Evaluating the adequacy and effectiveness of key performance areas leadership responses Lwazi Goqwana 11/11 Eskom’s performance measurement methodology • Review of the number of former employees flagged • Ensuring adequate support mechanisms and Ayanda Mafuleka 10/11 as well as the appropriateness of short-term and monitoring any potential adverse impact of Eskom’s on the Eskom database that cannot be rehired Leslie Mkhabela 11/11 long-term incentive schemes due to dismissal or pending disciplinary processes, fight against fraud, corruption and other criminality • Making recommendations to the Board on the as well as recommendations to strengthen on leadership and employees in the face of criminal Bheki Ntshalintshali 11/11 appointment, removal and resignation of prescribed governance, oversight and processes related to threats officers and senior executives, ensuring these employee flagging • Monitoring progress on technological changes Representation at year end processes are credible and transparent as well as divisional and functional leadership • Update on Eskom’s Women Advancement 1 Programme (EWAP) and initiatives to support responsibilities related to human capital KEY ACTIVITIES DURING THE YEAR inclusion, management of employees with disabilities • Overseeing the turnaround, capacity and capability The committee considered the following and, where and women in technical and leadership roles of the EAL required, recommended matters for noting or • Progress on the turnaround of the Eskom • Monitoring the implementation of leadership 3 Equity 3 Age 3 approval by the Board: Academy of Learning (EAL), including the digital development programmes to ensure appropriate • Feedback on vacant executive positions as well transformation project to establish a smart campus experience and leadership quality at both an 2 as appointments under the new Exco structure and other innovations individual and organisational leadership level identified by the executive selection committee • Repositioning of leadership development • Overseeing leadership continuity, succession ACI female ACI male 40–49 50–59 60+ • Integration of the new executive team programmes across all leadership segments planning and talent management strategies, to • Eskom’s remuneration strategy, including the • Technological changes impacting human capital, the enhance leadership quality and stability development and implementation of policies HR digitisation strategy, as well as progress on key • Determining balanced scorecard criteria to Committee’s focus Composition relating to remuneration of directors and initiatives and digital solutions measure and monitor executive performance Human capital 6 members executives, as well as related benchmarks • Overview of people management practices and for FY2026, including finalising performance Intellectual capital 100% independent • Policies governing the appointment of subsidiary compacts for the GCE and GCFO, and ensuring non-executive directors people-related aspects of the Generation recovery Social and relationship executives that responsibility for ESG matters is adequately capital GCE and GCFO attend by • Performance compacting structure for executives FUTURE FOCUS AREAS reflected in executive compacts invitation as officials for FY2025 and FY2026 Focus areas for the coming year include: • Monitoring the group’s diversity, equity, inclusion • Long-term incentive scheme awards and vesting • Driving implementation of the committee’s human and belonging strategy, with a greater focus PURPOSE conditions for eligible executives for FY2024 and capital priorities, including: fostering a high- on improving gender representation at senior The committee’s responsibilities include: FY2025 performance ethical culture; positioning Eskom as managerial levels and enhancing support for women • Overseeing human capital strategies, policies • Interim payout under the short-term incentive an employer of choice; developing a future-fit and transitioning through menopause and performance, including labour relations and (STI) scheme for FY2025, based on approval to productive organisation; and enhancing skills and • Reviewing key human capital policies, including the employment equity reimplement the scheme capabilities across the group security protection policy for top leadership and • Promoting a high-performance ethical culture as • Implementation of a process for addressing income • Quarterly monitoring of human capital the organisation’s remuneration policy well as reflecting on the ethical implications of differentials of employees performance and people-related risks, including • Enhancing awareness of the impact of gender- matters considered by the committee • Proposed remuneration for NTCSA non-executive employee fatigue during crisis periods based violence and ensuring adequate support to • Reviewing the adequacy and effectiveness of skills directors • Reviewing people-related matters of Eskom’s employees and people management processes • Update on Eskom’s strategic focus areas relating to integrated report, corporate strategy, as well as • Ensuring appropriate leadership succession human capital internal audit and forensic reports plans are in place for executive directors, senior • Eskom’s leadership strategy executives and prescribed officers, and annually reviewing these plans 64 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Remuneration report for the year ended 31 March 2025 HCR is mandated by the Board to oversee key There are separate remuneration policies in place REMUNERATION PRACTICES FOR The latest fee structure, implemented in line with human capital policies, including those that ensure due to different remuneration practices for NEDs, NON-EXECUTIVE DIRECTORS the shareholder’s remuneration guidelines, is fair, responsible and transparent remuneration across executives, managerial employees and bargaining HCR makes recommendations on NED depicted below. Eskom, covering all employees, executives and non- unit employees, each of which is discussed in further remuneration to the Board, for consideration executive directors (NEDs). In line with King IV, HCR detail below. and approval by the shareholder in line with Fee components provides assurance that remuneration practices are remuneration guidelines for SOCs. consistent with Eskom’s long-term strategy, workforce HIGHLIGHTS FOR THE YEAR Board retainer fees Paid monthly stability, risk appetite and stakeholder expectations. FY2025 represented a pivotal period in strengthening Under the previous remuneration structure applicable Chairman fees per annum R1 598 572 executive and leadership capacity under the until FY2024, NEDs received fixed committee Board member fees per annum R446 749 BACKGROUND INFORMATION stewardship of the GCE. In line with the Board’s allocation fees irrespective of the number of meetings Meeting fee for approved The Companies Amendment Act, 2024 has introduced mandate and shareholder requirements, the Board attended. Effective from 1 April 2024, the shareholder meetings attended Paid quarterly provisions to enhance transparency and disclosure implemented several important interventions affecting approved changes to the remuneration structure for Committee chair fee per meeting R86 601 requirements for remuneration and pay equity. remuneration-related matters. Collectively, these NEDs to a hybrid model that includes a fixed retainer Committee member fee per meeting R57 734 measures support Eskom’s turnaround strategy and a fee for meeting attendance, capped based on The Amendment Act, signed into law in July 2024, by aligning leadership incentives with strategic the number of meetings approved by the shareholder, Independent benchmarking was conducted by introduced stringent new reporting obligations imperatives, embedding accountability and ensuring in line with Government’s guidelines on remuneration external remuneration advisory firms to assess the for public entities and SOCs. While certain that remuneration outcomes are directly tied to and incentives. The Chairman and committee chairs fairness, reasonableness and alignment of Eskom’s provisions took effect on 27 December 2024, the shareholder compact criteria. receive a higher fee. NED remuneration with comparable SOCs and commencement date for the remuneration and The following key interventions were implemented broader market practices. The comparison group was pay-gap disclosure requirements under sections 30A This change reflected prevailing best practice at during the year: carefully selected to include organisations of a similar and 30B is yet to be proclaimed. Nevertheless, in the time and was designed to position Eskom’s scale, complexity and strategic importance to Eskom, the interests of transparency and accountability to • Reinstated a short-term incentive scheme for remuneration in line with the market median. The encompassing other large SOCs, regulated utilities and stakeholders, Eskom has adopted key principles of executives and staff to ensure that all employees revised approach aligns Eskom’s NED remuneration selected private sector businesses with comparable section 30B to enhance its remuneration disclosure in are incentivised to contribute toward ensuring practices with the shareholder’s remuneration governance responsibilities. This benchmarking was this report. Eskom’s long-term sustainability. Payments framework and strengthens fairness and transparency conducted to ensure that NED remuneration is were self-funded from operational efficiencies in how directors are remunerated during a period of OUR APPROACH TO REMUNERATION positioned fairly within the public sector and remains in compliance with the remuneration-related elevated governance demands. HCR strives to ensure that remuneration practices consistent with shareholder guidelines. condition of the Eskom Debt Relief Act, with no encourage value creation, support achievement reliance on tariff increases or windfalls NED remuneration was therefore structured to Due to Eskom’s nature, size and complexity it does of our strategic objectives and advance long-term comprise the following during FY2025: • Concluded the process launched in FY2018 to not have peers that are truly comparable, which sustainability by: address income differentials identified by the makes benchmarking more challenging. Eskom also • Adhering to principle 14 of King IV, which requires then Department of Labour, in terms of Eskom’s faces a unique governance burden, given its central that remuneration practices are fair, responsible, Fixed monthly retainer commitment to organised labour role in South Africa’s energy security, the systemic transparent and promote the achievement of Based on directors’ membership and/or • Implemented wage increases for the final year of challenges facing the organisation, the implementation strategic objectives in the short, medium and chairmanship of Board committees the multi-year agreement that was concluded with of a complex legal separation strategy and the long term heightened levels of scrutiny and oversight required organised labour in June 2023 and also awarded cost- • Implementing Government’s guidelines for the of-living adjustments to managerial staff, providing Quarterly meeting fees by the Board. remuneration and incentives of executives, stability and predictability in labour relations Based on Board and committee meetings prescribed officers and NEDs of SOCs attended, capped based on the number of • Ensuring alignment of individual performance meetings approved by the shareholder to organisational targets set in the shareholder compact • Complying with the remuneration-related Incidental expenses condition of the Eskom Debt Relief Act, 2023 Reimbursement of expenses incurred by as amended, which requires that remuneration directors in fulfilling their duties towards adjustments do not negatively affect Eskom’s overall Eskom financial position and sustainability 65 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Remuneration report continued REMUNERATION BASED ON MEETING ATTENDANCE BREAKDOWN OF NED REMUNERATION GOVERNANCE OF SUBSIDIARIES The shareholder approves the number of scheduled meetings in terms of the Board meeting calendar, which is The year-on-year increase in NED remuneration The appointment of experienced NEDs at NTCSA prepared in advance of each calendar year. Allowance is also made for approval of additional meetings for the reflects the change in the remuneration structure and Escap has strengthened subsidiary board Board and its committees. Board members are remunerated for attendance of scheduled and additional approved applied in FY2025 as discussed earlier, which aligns effectiveness and supported Eskom’s broader meetings. However, they are not remunerated for any meetings beyond that cap (reflected as ad hoc meetings in fees to actual work performed. transformation and unbundling strategy, aligned to the table below). The total of the scheduled, additional and ad hoc meetings correlates to the number of meetings the Electricity Regulation Act, 2006 and the national disclosed in the respective Board committee reports. R’000 2025 2024 energy transformation agenda. Non-executive directors of Scheduled Additional Ad hoc Total Eskom Holdings SOC Ltd Furthermore, remuneration structures for subsidiary per Board approved Total paid meetings (not meetings Current directors 22 396 10 576 boards were benchmarked and harmonised with those Number of meetings calendar meetings meetings remunerated) held of Eskom Holdings, while allowing for appropriate Mteto Nyati (Chairman) 2 724 1 358 differentiation to reflect the unique mandates, Board 8 2 10 2 12 Leslie Mkhabela (LID) 1 832 823 governance complexities and operational challenges of Audit Committee (formerly 8 2 10 3 13 Fathima Gany 2 352 1 081 individual subsidiaries. Audit and Risk Committee) Business Operations Performance Lwazi Goqwana 1 775 754 Committee 4 1 5 3 8 Clive le Roux 2 237 1 061 Eskom is in the process of developing a standardised Governance and Strategy Ayanda Mafuleka 1 832 820 subsidiary NED remuneration policy to guide the 4 4 8 2 10 Dr Tsakani Mthombeni 1 832 849 determination of fair, transparent and market-related Committee Human Capital and Remuneration Bheki Ntshalintshali 1 775 873 fees for subsidiary directors. This policy will promote 4 2 6 5 11 sound governance by aligning subsidiary NED fees Committee Tryphosa Ramano 2 006 1 018 Investment and Finance Committee 6 7 13 5 18 Dr Busisiwe Vilakazi 1 832 881 with the PFMA, the Companies Act, King IV principles Risk Committee (from Dr Claudelle von Eck 2 199 1 058 and the shareholder’s remuneration framework. It will – – – 1 1 also safeguard the independence and effectiveness of February 2025) Former directors – 1 609 subsidiary boards by ensuring that their remuneration Social, Ethics and Sustainability 4 1 5 – 5 Committee Mpho Makwana (former structures avoid conflicts of interest, preserve Chairman)1 – 933 objective judgement and enable directors to discharge Total 38 19 57 21 78 Dr Rod Crompton2 – 676 their fiduciary duties without undue influence. Subtotal 22 396 12 185 Through these measures, Eskom aims to strengthen During the year, the Board and its committees held The Board has had to respond swiftly to operational Eskom NEDs serving on oversight, enhance governance effectiveness and a total of 78 meetings (2024: 94), exceeding the risks, structural reforms and to guide Eskom’s subsidiary boards reinforce accountability at subsidiary level, thereby number of meetings approved by the shareholder. turnaround. These extraordinary circumstances Escap SOC Ltd3 318 – improving operational performance and supporting The significant number of ad hoc meetings attended meant that routine quarterly or scheduled meetings Ayanda Mafuleka 4 188 – the group’s long-term sustainability. without remuneration reflects the commitment of were insufficient to discharge the directors’ Leslie Mkhabela 5 130 – the Board and its committees to adequately address fiduciary duties effectively. Additional meetings governance requirements and respond to heightened and engagements were necessary to ensure timely NTCSA SOC Ltd 6 2 177 – governance demands. decision-making, protect organisational resilience, Dr Busisiwe Vilakazi 1 104 – maintain stakeholder confidence and uphold the Tryphosa Ramano 1 073 – Board members also participate in workshops, portfolio highest standards of governance during a period of and standing committee meetings and site visits, as well heightened risk and transformation, which demanded Total remuneration 24 891 12 185 as other engagements with various stakeholders, all of intense and frequent oversight. which required significant time and commitment for 1. Resigned on 30 October 2023. Mteto Nyati was appointed as Chairman of the Board from 31 October 2023. which no additional remuneration is received. 2. Resigned on 27 February 2024. 3. Fees paid by Escap SOC Ltd. 4. Appointed on 8 October 2024. 5. Appointed on 5 September 2024. 6. Fees paid by Eskom Holdings SOC Ltd. 66 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Remuneration report continued REMUNERATION PRACTICES FOR The GCE and Chief Technology and Information • Average unplanned generation plant unavailability The Board retains full discretion on the amounts to EXECUTIVES Officer are both appointed on fixed-term contracts, below 14 000MW be paid at the end of the three-year vesting period, in Eskom remunerates executives based on the size and while the GCFO and other executive management • Cash from operations of at least R55.7 billion line with: complexity of their role and on performance outcomes. are permanent employees based on Eskom’s standard • Lost-time injury rate below 0.30 • The percentage of performance awards that Their packages are approved in line with shareholder conditions of service. vested, based on the performance targets and • An unqualified IFRS audit report guidelines for SOCs and public sector parameters. vesting conditions achieved Executive packages are reviewed annually against SHORT-TERM INCENTIVES • The value of the performance awards that vested, The burden of financial prudence and compliance with affordability criteria and are subject to oversight by The STI scheme approved by the shareholder for based on the grant value escalated at the money shareholder guidelines, together with the reluctance HCR to ensure that shareholder guidelines are adhered FY2025 is subject to qualification criteria and the market rate of professionals to join a state-owned company in to. Executives are not involved in the approval process, performance of set KPIs. An interim payout of up to crisis have made the recruitment and retention of top- and HCR maintains the right to adjust, withhold or Performance awards earned by executives 25% was made in December 2024 based on half-year tier executives far more challenging in recent years. veto any remuneration adjustments. The shareholder is performance. The balance based on full-year results To ensure fair remuneration of executives and top required to approve remuneration adjustments for the Future will be paid out in October 2025, with the GCE and management, independent benchmarking exercises GCE and GCFO. Performance performance GCFO payouts dependent on shareholder approval. are conducted to compare Eskom’s remuneration awards earned awards payable with the market. Remuneration packages are VARIABLE REMUNERATION Only executives in the employ of Eskom for six Name Number R million positioned at the 50 th percentile of the market. Variable remuneration is linked to the achievement of months or longer during a particular year qualify for Dan Marokane 18 000 000 11 430 individual and organisational performance objectives, an STI payout. Calib Cassim 12 000 000 7 740 Executive remuneration comprises both a guaranteed subject to defined gatekeepers. Short-term incentives Monde Bala 6 794 340 4 382 and variable component which is designed to (STIs) relate to a single financial year, whereas long- LONG-TERM INCENTIVES Bheki Nxumalo 6 794 340 4 382 demonstrate a clear relationship between performance term incentives (LTIs) cover a three-year period. The LTI scheme approved by the shareholder Segomoco and remuneration. for the period 1 April 2023 to 31 March 2026 6 794 340 4 382 Given Eskom’s financial constraints, bonuses were Scheppers grants performance awards to eligible executives. last paid to executives in FY2017. To encourage a Total 50 383 020 32 317 Guaranteed component Performance awards are linked to gatekeeper high-performance culture, the Board reinstated conditions and KPIs aligned with the Corporate Plan Ensures that talented individuals are attracted, short- and long-term incentive schemes for executives A total of 16 191 510 performance awards were and shareholder compact and include both financial retained and receive support to perform their following shareholder approval. This was critical to and non-financial targets. Awards only vest if KPI granted to eligible executives on 1 April 2023, with roles efficiently align executive and top management performance a further 34 191 510 performance awards granted targets are met. with organisational objectives, ensure delivery against on 1 April 2024. The performance awards are Variable component performance compacts and maintain compliance with Potential vesting percentages range from 0% to 100%. deemed to be valued at R1 each at grant date and governance and shareholder frameworks. Importantly, Each measure has a threshold and a stretch target are escalated at a money market rate to determine Short-term Long-term incentives the reintroduction of variable remuneration also with an expected (on-target) vesting of 50%. Should the value at reporting date. At year end, the carrying incentives Ensures the long- forms a central component of Eskom’s executive one or more of the conditions not be met, the final value of the outstanding performance awards Manages and term sustainability of retention strategy, recognising that competitive vesting percentage is reduced by the corresponding amounted to R28.1 million (2024: R8.8 million). facilitates the organisation incentive structures are essential to retaining the weight of the relevant vesting conditions. performance through retention specialised leadership talent required to drive Eskom’s None of the performance awards have vested to date, turnaround, while mitigating the risk of losing top The vesting conditions are based on key performance as the three-year vesting period will only conclude through a results- and long-term leadership to both local and international markets. indicators that include the following: on 31 March 2026. The vesting of the performance driven approach performance • Loadshedding awards is dependent on the executive remaining in that is collaborative, conditions and Performance conditions include financial and • EBITDA Eskom’s employment throughout the vesting period. transparent and fair targets non-financial targets in areas such as ensuring The performance awards lapse if employment ceases business sustainability and reliability of electricity • Debt relief conditions during the vesting period, other than for reasons such supply, providing for future power needs as well as • Just Energy Transition as retirement or death. GUARANTEED REMUNERATION supporting South Africa’s developmental objectives. • Audit findings on internal controls Guaranteed remuneration is fixed and includes The performance conditions are complemented by a • Unbundling allowances for motor vehicle expenses and personal set of gatekeeper conditions, each carrying a weight of security. Permanent employees also receive 25%, which include: compulsory benefits such as medical aid, pension, group life and death benefits. 67 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Remuneration report continued BREAKDOWN OF EXECUTIVE AND TOP MANAGEMENT REMUNERATION Only members of Exco are regarded as prescribed officers of the company. Their remuneration disclosed below covers only the period for which an individual served as a member of Exco. 1. No fees were paid to executives serving on subsidiary boards. 2025 2024 2. Other payments include accumulated leave paid out, sign-on bonuses, separation payments, long-service awards as well as allowances and insurance cover. Category, R’0001 Salary STI Other2 Total Salary STI Other2 Total 3. For 11 months of the previous year, Calib Cassim served as acting GCE and Martin Buys served as acting GCFO, both without Current Exco members additional compensation. Executive director remuneration has increased due to the appointment of Dan Marokane as GCE and return of Calib Cassim to the GCFO position. Executive directors3 15 000 1 211 2 601 18 812 6 127 – 212 6 339 4. Appointed as GCE on 1 March 2024 on a fixed-term contract. Other payments for FY2025 include a sign-on bonus awarded to the Dan Marokane 4 9 000 765 1 963 11 728 750 – 3 753 GCE. A further R2.5 million STI payout for FY2025, not disclosed above, is awaiting shareholder approval. Calib Cassim5 6 000 446 638 7 084 5 377 – 209 5 586 5. Served as acting GCE until 29 February 2024. Returned to the role of GCFO on 1 March 2024 on a permanent employment contract. A further R1.7 million STI payout for FY2025, not disclosed above, is awaiting shareholder approval. Other group executives 20 891 5 194 522 26 607 5 662 – 348 6 010 6. Appointed as a member of Exco on 1 June 2023. The Board approved an adjustment to align the remuneration of the group executives for Generation, Transmission and Distribution to the median of the market from 1 April 2024. Monde Bala did not receive Monde Bala 6 5 800 2 610 121 8 531 2 831 – 132 2 963 additional compensation while acting as Group Executive: Human Resources following the early retirement of Elsie Pule. Segomoco Roman Crookes7 1 750 – 37 1 787 – – – – Scheppers served as interim CEO of NTCSA from 1 July 2024 until the conclusion of his secondment on 31 July 2025. Nontokozo Hadebe7 1 708 – 24 1 732 – – – – 7. Appointed on 1 November 2024. Dr Candice Hartley 8 333 – 4 337 – – – – 8. Appointed on 1 March 2025. Portia Mngomezulu7 1 708 – 32 1 740 – – – – 9. Appointed on 1 February 2025. 10. Appointed on 1 December 2024. Rivoningo Mnisi9 717 – 29 746 – – – – 11. Served as Chief Information Officer until 31 October 2024. No longer a member of Exco following implementation of the new Exco Bheki Nxumalo6 5 800 2 584 208 8 592 2 831 – 216 3 047 structure. Alfred Seema10 1 367 – 34 1 401 – – – – 12. Served as acting GCFO until 29 February 2024. Len de Villiers7 1 708 – 33 1 741 – – – – 13. Former Group Executive: Legal and Compliance, resigned on 30 June 2023. Former Exco members 14 566 2 088 7 253 23 907 22 433 – 2 305 24 738 14. Served as acting Group Executive: Legal and Compliance from 15 December 2023 to 31 January 2024. 15. Former Group Chief Operating Officer, retired on 30 April 2023. Faith Burn11 2 293 – 64 2 357 3 765 – 120 3 885 16. Former Group Executive: Human Resources, retired early on 31 July 2024 by mutual agreement. Other payments for FY2025 include Martin Buys12 – – – – 2 750 – 87 2 837 separation and accumulated leave payments. Mel Govender13 – – – – 775 – 180 955 17. Served as acting Group Executive: Legal and Compliance from 7 July to 14 December 2023. Dawn Jackson14 – – – – 238 – 10 248 18. Former Group Executive: Government and Regulatory Affairs, resigned on 30 April 2023. Jan Oberholzer15 – – – – 458 – 1 038 1 496 19. Appointed as Head of Legal and Compliance on 1 May 2024 and served as a member of Exco until 31 October 2024. He remains a permanent invitee of Exco following implementation of the new Exco structure. The STI awarded for FY2025 amounts to R1.4 million, Elsie Pule16 1 174 – 6 412 7 586 3 523 – 145 3 668 but this is not disclosed above as he was no longer a member of Exco at the time that the STI was awarded. Winile Madonsela17 – – – – 750 – 28 778 20. Served as acting Group Executive: Government and Regulatory Affairs from 1 June until 9 August 2023. Nthato Minyuku18 – – – – 258 – 107 365 21. Served as Chief Procurement Officer until 31 October 2024. No longer a member of Exco following implementation of the new Exco Jerome Mthembu19 1 750 – 38 1 788 – – – – structure. Sumaya Nassiep20 – – – – 435 – 115 550 22. Served as acting Group Executive: Government and Regulatory Affairs from 10 August 2023 until 31 October 2024. No longer a member of Exco following implementation of the new Exco structure. Jainthree Sankar21 1 611 – 202 1 813 2 641 – 102 2 743 23. Former Group Executive: Transformation Management Office, fixed-term contract ended on 30 June 2024. Segomoco Scheppers6 5 800 2 088 296 8 184 2 831 – 192 3 023 24. Served as acting Group Executive: Legal and Compliance from 1 to 30 April 2024. Natasha Sithole22 1 070 – 12 1 082 1 148 – 13 1 161 Vuyolwethu Tuku23 715 – 185 900 2 861 – 168 3 029 Sthembiso Vezi24 153 – 44 197 – – – –  efer to note 49 in the annual financial statements for disclosure on the STI amounts paid by year end AFS R Total remuneration 50 457 8 493 10 376 69 326 34 222 – 2 865 37 087 68 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Remuneration report continued REMUNERATION PRACTICES FOR We completed the process to address income An interim payout of up to 25% was made in December 2024 based on half-year EMPLOYEES differentials in March 2025, thereby closing historical performance. The final payout, which was contingent on full-year results, was made on Our remuneration philosophy is designed to pay gaps to ensure fairness, transparency and 29 September 2025 after conclusion of the FY2025 external audit. attract, retain and motivate a skilled and high- compliance in accordance with our commitment to performing workforce, while remaining aligned with organised labour. The exercise commenced in FY2018, BREAKDOWN OF EMPLOYEE BENEFIT EXPENSE market benchmarks and shareholder expectations. in response to income disparities identified at the time R million 2025 2024 Eskom is strategically positioned as a preferred by the then Department of Labour. employer through the provision of market-related Salaries 29 537 27 083 remuneration pay structures, employee benefits VARIABLE REMUNERATION Overtime 3 253 3 029 and conditions of service. Eskom employees had not received annual short- Post-employment medical benefits 414 396 term incentives for the past six years due to poor Pension benefits 2 308 1 952 Our remuneration strategy is underpinned by operational performance and severe financial Annual bonus1 1 549 1 470 principles of fairness, transparency and alignment constraints. In FY2025, as part of Eskom’s broader Performance bonus2 3 731 – with Eskom’s turnaround objectives and subject to turnaround plan, the Board – supported by the Production bonus3 1 212 439 the conditions of the Eskom Debt Relief Act, 2023. shareholder – approved the reintroduction of a group Leave 1 171 986 Consequently, our approach balances financial STI scheme. This decision reflects a strategic view that Direct costs of employment 43 175 35 355 sustainability with the need to reward excellence and the performance gains from a motivated workforce Direct training and development 180 136 support employee wellbeing. outweigh the cost of the incentives. Temporary and contract staff costs 625 484 Employee remuneration is aligned with the market The STI scheme is designed to drive operational Other staff costs 1 378 1 124 median to balance affordability and competitiveness excellence, retain critical skills and reinforce a high- Gross employee benefit expense 45 358 37 099 for scarce skills. Employees are paid according to performance, ethical culture. It is subject to strict Capitalised to property, plant and equipment (2 198) (2 003) their contribution and the market value of their roles, qualification criteria and performance thresholds, or ensuring those who meet job requirements receive at “gatekeepers”, set by the shareholder. These include Net employee benefit expense 43 160 35 096 least the 50th percentile salary. Additional premiums the requirement that profit before tax must exceed 1. The annual bonus represents a thirteenth cheque. Refer to note 27.3 in the annual financial statements. are considered for jobs requiring specialised skills or the approved budget for the year which acts as 2. The performance bonus relates to the STI scheme which was reinstated from 1 April 2024. An additional challenging work environments, such as nuclear work gatekeeper to the scheme. 13.5% relating to the pension portion of the STI payout is included under pension benefits. The total STI or shift-based roles. scheme amounts to R4.2 billion. The STI bonus pool is determined by performance 3. The production bonus is self-funded and rewards employees for improved efficiency, operational productivity and performance in Generation, NTCSA and Distribution. GUARANTEED REMUNERATION against five KPIs, weighted as follows: For bargaining unit employees – who make up about • Generation performance: Unplanned capability 81% of our workforce – remuneration includes a basic loss factor, UCLF (contributing 40% to the pool) salary, a thirteenth cheque (disclosed as an annual • Financial performance: Cash from operations bonus) and a comprehensive suite of benefits such (contributing 30%) as pension, medical aid, death cover and allowances • NTCSA performance: System minutes lost for housing, transport and communication, subject <1 minute (10%) to qualifying criteria. Under the three-year collective • Distribution performance: System average bargaining agreement for FY2024 to FY2026, interruption duration index, SAIDI (10%) bargaining unit employees received a cost-of-living adjustment of 7% in July 2024. • Safety performance: Lost-time injury rate, LTIR (10%) Managerial employees receive a guaranteed cost- to-company package that includes medical aid, To be eligible for a bonus, employees must achieve pension, dread disease cover and group life benefits. an individual performance rating of 3 or higher on In October 2024, an average increase of 7% was a 5-point scale. The final bonus amount is then implemented, comprising a guaranteed cost-of- calibrated based on the individual’s performance living adjustment of 4% and a discretionary element rating. to reward and retain top performers and address income disparities. 69 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Remuneration report continued ENSURING PAY EQUITY DEVELOPING ADAPTABLE AND FIT-FOR- STRENGTHENING OUR RELATIONSHIP WITH CONCLUSION Pay equity refers to the concept of providing PURPOSE REMUNERATION FRAMEWORKS ORGANISED LABOUR HCR reaffirms its commitment to fair, responsible and equal pay for work of equal value, regardless of an Performance agreements will be reviewed to The recognition agreement that governs engagement transparent remuneration that supports Eskom’s long- employee's gender, ethnicity or other characteristics. ensure that they remain flexible and support the with organised labour, concluded in 2000, is outdated term sustainability. By conducting and implementing It is aimed at eliminating unjustified wage disparities overall strategic outcomes of the organisation while and no longer aligned with Eskom’s evolving structure. recommendations from the total compensation and and promoting fairness in compensation practices incorporating stretch targets. A comprehensive review is scheduled for FY2026. rewards benchmarking study planned for FY2026, we within the workplace. will ensure that Eskom’s remuneration framework The unbundling of Eskom requires adaptable The next multi-year wage agreement is due for remains competitive, affordable and aligned to both Eskom ensures pay equity by applying the following remuneration and labour frameworks suited to a conclusion in FY2027. Preparations are in progress shareholder expectations and market realities. This principles: liberalised energy market, to balance competitiveness to ensure that the process commences earlier than commitment is central to retaining scarce skills, • Benchmarking salary scales to the external market and affordability. We will ensure that remuneration in previous years, to ensure that an agreement is strengthening governance and positioning Eskom as a • Aligning internal pay scales according to job grade and governance frameworks are applied consistently concluded within stipulated timelines. future-fit utility in a liberalised energy market. • Strict application of remuneration policies and job- across the group. matching principles Subsidiary NED fees will be aligned to the group • Using annual increases to address unjustifiable strategy. Although the introduction of NEDs to disparities where possible subsidiary boards will increase overall costs, this is a strategic investment to strengthen independent FUTURE FOCUS AREAS oversight, reinforce governance resilience and support Eskom’s remuneration landscape faces several key Eskom’s broader unbundling and transformation challenges. Our focus in coming years will be to find agenda. proactive solutions to these challenges. MANAGING ELEVATED LEVELS OF OVERTIME ATTRACTING AND RETAINING SKILLED Overtime costs increased by 7% year-on-year, EMPLOYEES mainly driven by interventions under the Generation Financial constraints in recent years have limited Recovery Plan which led to improved operational recruitment and reskilling opportunities, thereby performance. Although necessary in the short slowing progress against long-term workforce plans. term, sustained reliance on overtime inflates costs Furthermore, scarce skills continue to be targeted and negatively impacts productivity and employee by IPPs and international projects which offer more wellbeing. Measures are being implemented to better competitive packages, increasing the risk of attrition in manage overtime expenditure, including stricter critical roles. approval processes and accountability at divisional level to mitigate against abuse. To address these challenges and ensure that remuneration remains competitive, we plan to Additionally, management is actively addressing key conduct a benchmarking study on total compensation person dependencies to strengthen organisational and rewards in FY2026. This will cover all Eskom’s capacity and reduce overreliance on one or a few divisions including subsidiaries. Any recommendations individuals. emanating from the study will be reviewed prior to being implemented. 70 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Investment and Finance Committee (IFC) for the year ended 31 March 2025 PURPOSE • Eskom’s going concern assessment Membership and attendance FUTURE FOCUS AREAS The committee’s responsibilities include: • Review of progress on the legal separation of Number of meetings 18 Focus areas for the coming year include: • Overseeing financial budgets, capital and borrowing Eskom and associated financial implications programmes, as well as procurement strategies • Appointing an additional member with expertise in Attendance 88% • Commercial strategy and mandate to negotiate corporate finance • Approving business cases for new ventures, and conclude service contracts between NTCSA Chair: Tryphosa Ramano 17/18 • Reviewing Eskom’s capital allocation framework capital investments, projects, disposals and other and Eskom Holdings’ Corporate, Generation and Lwazi Goqwana 14/18 commercial matters Distribution divisions • Monitoring the execution of approved capital • Monitoring the concept, design, execution and • Conceptualisation of Eskom’s proposed renewable projects Clive le Roux 16/18 finalisation phases of major capital projects energy company • Overseeing procurement strategies relating to Dr Tsakani Mthombeni 16/18 capital projects • Overseeing Eskom’s treasury function • Feedback on the long-term operation of Koeberg Power Station • Evaluating and monitoring the liquidity and balance Representation at year end KEY ACTIVITIES DURING THE YEAR sheet of the Eskom group, including the impact of • Regular updates on Eskom’s liquidity position and The committee considered the following and, where liability management Government’s debt relief support 1 1 1 required, recommended matters for noting or • Write-off of one third of the ring-fenced arrear • Monitoring the progress in curbing and reducing approval by the Board: debt of Rand West City through the municipal municipal arrear debt • Scenarios for MYPD 6 and Eskom’s MYPD 6 debt relief programme. Additional write-offs Equity Age 2 revenue application submission to NERSA were approved after year end, as detailed • The disposal strategy for EFC, including the sale of under “Financial review – Municipal debt relief 1 its loan book and interests in Nqaba Finance 1 (RF) programme” from page 96 2 Ltd to African Bank Limited • Resolution of the dispute with SARS regarding ACI female ACI male 40–49 50–59 60+ • Updated Generation strategic review for the diesel levy refunds White male continued operation of coal-fired power stations • Status update on Eskom’s reportable irregularities • Amendments to Eskom’s delegation of authority • Eskom’s financial plan and borrowing plan for FY2026 Committee’s focus Composition framework to FY2030 for inclusion in the Corporate Plan Financial capital 4 members • Eskom Treasury policies and feedback on an Manufactured capital 100% independent non- independent review of Eskom’s hedging strategy In addition to the above, the committee approved executive directors • Eskom’s capital investment plan, as well as matters within its delegated authority and GCE and GCFO attend by additional capital expenditure requirements linked recommended those above its approval limits to the invitation as officials to Eskom’s capital allocation framework Board. These matters included various procurement strategies, capital investment approvals or revisions, • Budget allocations for NTCSA and Distribution negotiated pricing agreements, as well as other under the standard offer programme commercial decisions. • Cross-border pricing methodology for power supply agreements 71 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Report by the Social, Ethics and Sustainability Committee (SES) for the year ended 31 March 2025 PURPOSE • SES related matters in the internal audit and FUTURE FOCUS AREAS Membership and attendance The committee’s responsibilities include: combined assurance plans Focus areas for the coming year include: Number of meetings 5 • Executing the statutory functions of a social and ethics • Revisions to the ethics management strategy and • Ensuring ongoing compliance with the requirements Attendance 97% committee set out in the Companies Act, 2008 implementation plan, as well as to Eskom’s Code of the Companies Act, 2008 and nuclear safety • Overseeing socio-economic development; good of Ethics and related policies, to address ethics- regulations Chair: Bheki Ntshalintshali 5/5 related risks corporate citizenship; environmental and climate • Overseeing Eskom’s ethics management strategy Fathima Gany 5/5 change initiatives; health and safety programmes; • Updated Generation strategic review for the and related governance frameworks Clive le Roux 4/5 and ensuring reasonable assurance of selected KPIs continued operation of coal-fired power stations • Considering rehabilitation and restorative justice through the sustainability audit • Environmental risks related to the rehabilitation of practices with respect to suppliers Leslie Mkhabela 5/5 • Monitoring nuclear strategies and policies, including ash dams and ash dumps • Reinforcing Eskom’s role as a socially committed Dr Tsakani Mthombeni 5/5 nuclear safety in accordance with regulatory • Independent environmental and social review and responsible corporate citizen in line with Dr Busisiwe Vilakazi 5/5 requirements and international best practices of the Kusile stack remediation programme, its developmental mandate, through enhanced • Acting as the statutory social and ethics committee conducted on behalf of Eskom’s lenders corporate social responsibility and sustainable Dr Claudelle von Eck 5/5 for Eskom’s wholly owned subsidiaries, excluding development practices NTCSA, which has its own social and ethics In addition, the committee provided oversight and • Monitoring compliance with environmental laws Representation at year end committee considered reports on ethics monitoring and King and remediation plans for areas of non-compliance, IV compliance; human capital sustainability, including 1 as well as Eskom’s response to climate change and KEY ACTIVITIES DURING THE YEAR compliance with labour and employment regulations; the Just Energy Transition 2 3 The committee considered the following and, where nuclear oversight, including safety, plant performance and key nuclear matters; sustainability performance • Exercising ongoing oversight of performance against required, recommended matters for noting or 3 of Eskom’s subsidiaries; progress on Eskom’s capacity stakeholder engagement plans Equity Age approval by the Board: expansion programme; safety, health, environment • Overseeing the development and implementation • Eskom’s stakeholder engagement plan, together and quality performance; as well as supplier of Eskom’s ESG framework with quarterly stakeholder engagement reports development, localisation and industrialisation. • Implementing the provisions of the Companies 3 • Update on Eskom’s Just Energy Transition, Amendment Bill, 2023 relating to social and ethics 2 including socio-economic impact assessments ACI female ACI male 40–49 50–59 60+ committees White male and repurposing plans of several power stations,  efer to the 2025 sustainability report for more SR R including Hendrina, Komati and Grootvlei information relating to Eskom’s sustainability • Eskom’s integrated report and sustainability report, practices Committee’s focus Composition including external audit feedback on the reasonable Financial capital 7 members assurance of selected sustainability KPIs Manufactured capital 100% independent non- • Eskom’s King IV application register Natural capital executive directors • Status update on Eskom’s reportable irregularities Human capital GCE and GCFO attend by relating to matters under the purview of SES Intellectual capital invitation as officials Social and relationship capital 72 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Fostering an ethical culture The Board, through its Social, Ethics and Sustainability REVISING OUR ETHICS STRATEGY The ethics strategy serves as a framework for The Board has adopted an ethics manifesto to Committee, oversees the governance of ethics in Our dedicated Ethics Office continues to play a vital supporting a high-performance ethical culture and support the ethics strategy, reaffirming Eskom’s Eskom, in alignment with principles 1 and 2 of King IV. role in implementing Eskom’s ethics strategy, providing includes the following focus areas: commitment to ethical business practices and The Board is committed to cultivating a guidance on ethical matters in the workplace, • Ensuring that Eskom’s ethics policies are accessible emphasising our leadership’s commitment to abide high-performance, ethical culture and upholds a developing and monitoring ethics-related policies and and effective in managing ethics-related risks by and act in accordance with the following guiding zero-tolerance stance on unethical conduct. facilitating mandatory annual ethics training for all • Recognising ethical behaviour and ensuring the principles: employees. Where the Ethics Office is made aware effectiveness of processes to address unethical Our Code of Ethics, known as the “The Way”, of any unethical behaviour involving crime, fraud behaviour serves as the foundation of Eskom’s ethical values- and corruption, these matters are referred to our driven culture. “The Way” is underpinned by six • Sustaining ethical excellence through enhanced dedicated forensics function for investigation. monitoring and reporting, together with core values, collectively referred to as ZIISCE, which guide decisions and behaviours at all levels of the We have recently undertaken an independent ethics independent assessments organisation and reflect our commitment to ethical risk assessment, conducted by The Ethics Institute, • Repositioning and adequately resourcing the Ethics leadership, integrity and accountability. to identify, assess and manage ethics-related risks Office within the organisation. The assessment provided • Ensuring all directors, employees and suppliers are valuable insights for strengthening ethical practices trained on Eskom’s ethics policies Zero Harm and has informed the development of a revised ethics • Encouraging leadership at all levels of the protecting the Eskom way management strategy, which was approved by the organisation to demonstrate their commitment to Board in August 2024, as well as revisions to key a high-performance ethical culture through their Integrity ethics-related policies. behaviour and conduct acting the Eskom way Innovation thinking the Eskom way Sinobuntu caring the Eskom way To establish To visibly To ensure To ensure that To ensure To ensure that To ensure To demonstrate a grounded support ethics that executive employees are that Eskom’s Eskom cultivates our suppliers a bias for action Customer satisfaction and mature in Eskom by management aware of the reputation a speak-up and business in fulfilling the serving the Eskom way understanding setting the tone takes ethical values is restored, culture where partners actively Board's ethics of ethics in for a high- accountability of Eskom and and that the people feel participate manifesto in Excellence Eskom that goes performance, in making ethics are empowered organisation safe to raise in rooting everything we working the Eskom way beyond anti- ethical culture, a priority and to apply these becomes ethical concerns out unethical do and say corruption and and lead by actively drives values in the attractive to and report practices and compliance example ethics initiatives workplace prospective behaviour that cultivate an Adherence to “The Way” is not optional; it is the way in Eskom employees does not comply ethical culture we do business in Eskom, guiding the way in which and business with Eskom's we interact with one another as well as with all of our partners Code of Ethics stakeholders. 73 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Fostering an ethical culture continued MANAGING CONFLICTS OF INTEREST SUPPORTING WHISTLE-BLOWING Our Code of Ethics is supported by conflict of MECHANISMS interest and private work policies, which clearly define We encourage all stakeholders to report suspected the responsibilities of directors and employees in incidents of unlawful or unethical conduct involving identifying, declaring and managing actual, perceived directors, employees or suppliers. Reports may be or potential conflicts of interest. They also govern submitted through Eskom’s independent whistle- private work engagements, supplier relationships and blowing hotline or Government’s anti-corruption the exchange of business courtesies. This ensures that channels. These mechanisms are designed to ensure individuals act transparently and avoid situations that confidentiality, protect whistle-blowers and uphold could compromise their integrity. the integrity of the reporting process. All employees and directors are required to submit an Employees are often the first line of defence against annual declaration of interest by 30 June, regardless crime, fraud, and corruption. Therefore, it is the of whether a conflict exists, and to update their duty of every employee to address and report declarations as soon as circumstances change. Our any unethical conduct or non-compliance with declaration system has been recently enhanced to “The Way”. Eskom’s whistle-blowing policy aligns with identify politically exposed persons. The system the Protected Disclosures Act, 2000, and provides also integrates with the Companies and Intellectual robust protection and support for whistle-blowers Property Commission (CIPC) database to verify against any form of victimisation or occupational active directorships. detriment. While our whistle-blowing policy provides the necessary safeguards, we continue to foster Completion rate of annual declarations a culture of openness and accountability, where speaking up is encouraged and supported. Employees at all levels 99.8% (2024: 99.7%) Exco 100% (2024: 100%) Eskom whistle-blowing hotline Board 100% (2024: 100%) Phone: 0800 11 27 22 Email: eskom@whistleblowing.co.za The declarations made by Board and Exco members are verified by the Ethics Office on an annual basis Government anti-corruption hotlines and no deviations have been identified. Phone: 0800 701 701 The Board’s conflict of interest register, which https://www.gov.za/anti-corruption/hotlines details recusals in terms of section 75 of the Companies Act, is available at www.eskom.co.za/ about-eskom/company-information/ Employees that either fail to obtain prior approval for private work, declare a conflict of interest or submit a declaration when required are subject to investigation and disciplinary processes. Upholding our ethical standards extends to all individuals acting on behalf of Eskom, including suppliers. If a supplier is found to be in contravention of our Code of Ethics, they will also be subject to disciplinary processes and potential sanctions. This reinforces our zero-tolerance stance on unethical conduct. 74 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Fighting crime, fraud and corruption Since its appointment in October 2022, one of In FY2023, Eskom commissioned an independent STRENGTHENING ESKOM’S RESPONSE TO the Board’s priorities has been to restore good assessment of its crime risk landscape, focused on UNLAWFUL BEHAVIOUR governance, strengthen internal controls and promote risks related to bribery and corruption, financial KEY INTERVENTIONS BY THE BOARD accountability. Significant attention has been given to crime, physical asset crime, cyber-crime and money The Board acknowledged that addressing these issues fighting crime, fraud and corruption across the group laundering. The objective was to identify potential is essential to securing Eskom’s long-term sustainability by addressing issues stemming from weaknesses in vulnerabilities, evaluate existing controls, identify and rebuilding stakeholder confidence, and recognised the internal control environment and strengthening systemic weaknesses and recommend remediation this as a complex, multi-year undertaking that will investigative capacity and consequence management measures. demand a sustained effort. processes. The assessment identified areas requiring enhanced Enhancing organisational structures, together with The effects of crime, fraud and corruption have oversight and control. These included vulnerabilities strengthening people, processes and systems, has garnered extensive media coverage in recent years in fraud prevention, cyber-security and physical been critical to restoring Eskom’s capability to and have been the subject of external inquiries and asset protection. It also highlighted the need for effectively address governance and compliance investigations – most notably through the reports on clearer accountability, improved training, as well challenges. Key milestones and long-term structural the findings of the State Capture Commission – which as more robust systems and processes to suppor t reforms implemented over the Board’s term are have been discussed in previous integrated reports. whistle-blowing, procurement transparency and depicted below, marking the journey towards Over time, these have eroded Eskom’s reputation and compliance. fostering a high-performance, ethical culture. relationship with key stakeholders and undermined operational and financial sustainability. Internal control weaknesses have contributed to an Restructured Group Investigations environment which is susceptible to crime, fraud and Assurance Project Management and Security corruption. These weaknesses have also resulted and Forensics Office established Department in significant and numerous external audit findings Department into to support Forensics established to ARC split into separate Internal in expediting the consolidate Eskom’s separate Audit in recent years and repeat audit qualifications from Commencement Audit and Forensics backlog of fraud and investigative Committee and Risk external auditors, as well as delays in concluding of Board’s term departments corruption cases functions Committee the annual financial statements within legislated timeframes. Oct 2022 Jul 2023 Jun 2024 Oct 2024 Feb 2025 Key contributing factors include a lack of skilled resources in critical areas; inadequate adherence by employees to well-documented processes, policies and procedures; as well as insufficient review and monitoring of preventative and detective controls by Oct 2022 Sep 2023 Jul 2024 Dec 2024 May 2025 management. • Initiated review Eskom and State Eskom Vetting Audit Recovery Rapid Response of Eskom’s crime Security Agency Fieldwork Unit Programme initiated Unit established IR Refer to “Conclusion on assurance and controls” from risk landscape sign Memorandum established to improve external to expedite page 60 for the Audit Committee’s conclusion on the • State Capture of Understanding audit outcomes investigations control environment to establish Eskom Task Team’s Vetting Fieldwork implementation Unit plan submitted to the Presidency 75 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Fighting crime, fraud and corruption continued The Board has adopted a multi-pronged approach to combatting crime, fraud and corruption, centred on Interventions to fight crime, fraud and corruption prevention, detection, investigation and corrective action. 1 Prevention 2 Detection 3 Investigation 4 Correction Preventative efforts have focused on reinforcing ethical behaviour as well as strengthening governance Proactive prevention of crime, Faster identification of suspicious Effective analysis and confirmation Case resolution and prevention of and controls, supported by improved systems fraud and corruption activity of crime, fraud and corruption recurrence and processes. Detection capabilities have been • Developed Eskom’s fraud • Implemented advanced analytics • Established Group Investigations • Established State Capture Task enhanced to allow for more effective monitoring and prevention plan to enable transaction monitoring and Security (GIS) Department Team to implement Zondo identification of unlawful behaviour. Eskom has also • Improved training across ethics, and identify process and control • Established Project Management Commission recommendations invested in building internal capacity and adequately fraud awareness and procurement weaknesses Office (PMO) to expedite backlog • Reviewed policies, procedures resourcing specialist functions to investigate and respond to incidents swiftly and decisively, reinforcing practices • Improved detection capability in of cases and processes relating to supply a culture of accountability. Corrective actions aim to • Enhanced compliance of Eskom’s online vending system • Expansion of the PMO to chain management and human ensure that lessons from past incidents are translated declarations of interest (OVS) incorporate a Rapid Response Unit resources to improve consequence into tangible improvements, including improved • Digitisation of procurement • Enhanced Eskom’s enterprise • Established war rooms in response management consequence management, supplier oversight and processes and introduced e-auction resource planning (ERP) system to to incidents relating to Eskom’s ERP • Re-established Supplier Review closer collaboration with law enforcement to recover and e-tendering improve invoicing, reconciliations system and OVS Committee to enhance supplier losses and prevent recurrence. Several interventions • Monitored low-value procurement and detection of ghost vending • Ongoing development of a disciplinary processes across these areas are detailed alongside. mechanisms, such as local purchase • Improved reporting platforms and single centralised repository for • Strengthened partnerships with orders (LPOs), to reduce potential monitoring of whistle-blowing monitoring of all investigations law enforcement agencies to The Board is strengthening governance through abuse reports ensure successful outcomes on • Commissioned independent a revised ethics management strategy, along with Eskom’s cases, including financial • Adopted National Treasury’s investigations by external service the adoption of an ethics manifesto. These were recoveries central supplier database for providers, including the Special supported by revisions to key policies, including • Improved employee reference informal tendering requests for Investigating Unit (SIU) Eskom’s Code of Ethics as well as those relating to flagging processes on the human quotations to reduce procurement conflicts of interest, fraud prevention and whistle- resources system risks blowing, to address ethics-related risks identified from • Migrated to a new document • Ongoing review of lessons learned the independent ethics risk assessment and emphasise management system to enhance and corrective actions Eskom’s stance that no employee, nor related parties of employees, are allowed to do business with Eskom document control and support or its subsidiaries. audit readiness • Introduced security vetting for directors, executives and IR Refer to “Fostering an ethical culture” from page 73 employees in critical areas for further information • Conducted background checks during recruitment processes The adoption of a dedicated fraud prevention plan has been informed by past interventions, including Improving governance, oversight and monitoring of the end-to-end combined assurance model Eskom’s self-assessment on its compliance with • Implemented revised ethics strategy and related policies, and adopted the Board’s ethics manifesto the Organisation for Economic Cooperation and • Executed key structural improvements to improve oversight, including separating the Audit and Risk committee and restructuring the Assurance and Forensics Development’s (OECD) recommendations on Department into (1) Internal Audit with the Chief Audit Executive reporting functionally to to the Audit Committee and (2) Forensics (now part of GIS) reporting to anti-corruption, as well as the outcome of the the GCE independent crime risk landscape assessment. The fraud prevention plan is reviewed and updated • Strengthened Exco skills for oversight of internal controls, risk management and PFMA matters annually and consolidates ongoing initiatives with new • Established the audit recovery programme interventions to address emerging risks. • Commenced resourcing drives to capacitate finance, assurance and other oversight functions 76 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Fighting crime, fraud and corruption continued The Anti-Fraud and Corruption Integration GIS is mandated to perform independent forensic Eskom has expanded the scope of its data analytics Strengthening corporate governance practices and Committee (AFCIC), a management committee which investigations into cases of crime, fraud and to include the application of advanced analytics and ensuring compliance with applicable laws, regulations reports to the GCE, monitors the implementation corruption as well as other irregularities, supported artificial intelligence on large volumes of transactional and standards remains a key focus. Regrettably, of the fraud prevention plan and manages the by a panel of external investigators and through and operational data, with a focus on high-risk areas compliance with legal and regulatory requirements, assessment of fraud and corruption related risks. As collaboration with law enforcement agencies. across the group. The objective was to improve the particularly relating to the accuracy and completeness part of this, divisional fraud risk registers have been A programme to enhance forensic investigators’ skills understanding of the effectiveness of internal controls of information required by the PFMA, continues to reviewed to improve leadership accountability and in dealing with Eskom cases has been developed and and identify patterns of non-compliance and systemic remain a challenge. An audit recovery programme has coordination of treatment plans. Mandatory fraud is being rolled out. GIS is empowered to implement weaknesses that may not be visible through traditional been established to enhance compliance over a three- awareness training has also been implemented for recommendations arising from forensic investigations audit methods. year period, by addressing recurring audit findings all employees, together with development of a fraud to ensure consequence management is addressed and strengthening internal controls to improve audit prevention training framework to conduct targeted timeously. The department is also responsible for Several process and system enhancements have outcomes. training in high-risk areas. Anti-fraud and corruption Eskom’s security posture and the identification, also been identified through audit findings and awareness campaigns are being extended to suppliers. remediation and management of security risks. investigations. Given the integral role of Eskom’s ERP system on the internal control environment, initiatives IR Refer to “Upholding good governance – Audit recovery In FY2024, Eskom’s Assurance and Forensics While the pace of arrests, criminal convictions have been focused on enhancing automation, system programme” from page 81 for more information Department was restructured into separate Internal and civil judgments is largely dependent on law and access controls, document management, exception Audit and Forensics departments to enable these enforcement and judicial processes, we continue reporting and data analytics. We have appointed a To ensure accountability and transparency, Eskom has areas to focus on their primary functions. The to support these efforts, cooperating fully with service provider to assist with the use of analytical and adopted five new KPIs to monitor the effectiveness of independence of the Internal Audit Department was all external investigations and inquiries, as well as forensic tools to support early detection of fraud and initiatives to deal with crime, fraud and corruption, in strengthened by enhancing the reporting line of the instituting internal consequence management in corruption and flag transactions and anomalies which line with the shareholder’s expectations: Chief Audit Executive, who now reports functionally accordance with Eskom’s policies. require further investigation, as well as to build this • Whistle-blower reports assessed within 21 days, to the Audit Committee (formerly ARC), thereby capability within Eskom. Furthermore, a digital forensics to reinforce the commitment to timeous and fair maintaining independence from management. A dedicated PMO was launched to expedite the firm has been appointed to assist with addressing handling of concerns This function plays a critical role in monitoring the backlog of cases involving crime, fraud and corruption the risk of illicit prepaid electricity tokens generated and accelerate the resolution of disciplinary cases and • Forensic investigations initiated within 60 days of a effectiveness of internal controls. through Eskom’s online vending system, which preliminary assessment report being completed by criminal sanctions arising from internal and external contribute to Eskom’s energy losses. In July 2024, we established a vetting unit in investigations. The PMO refers all completed cases a forensic investigator, to facilitate timely action on collaboration with the State Security Agency to GIS and law enforcement agencies for further potential misconduct (SSA), to conduct security clearance assessments investigation and to fast-track convictions and  efer to the information block titled “Ongoing IR R • Cases where recommendations emanating from of non-executive directors, executives, employees, recovery processes. investigation into the breach of Eskom’s online forensic investigations have been referred for vending system” that follows for further detail disciplinary action and tabled with the presiding suppliers and other individuals with access to classified information and critical infrastructure. More recently, a Rapid Response Unit has been officer within 90 days, to monitor follow-through of established within GIS to expedite investigations, In the procurement environment, Eskom is consequence management and accountability The GIS Department was established to consolidate prioritising high-impact cases and those involving introducing digital tools and enhancements to • Directors’ and employees’ security clearance Eskom’s separate forensic, security and investigative infrastructure and economic crimes. The Rapid modernise procurement processes and improve the assessments submitted to the SSA for vetting, efforts into a unified structure to enhance prevention, Response Unit is being equipped with the necessary monitoring of procurement mechanisms that may to safeguard sensitive information and critical detection, investigation and correction of crime, resources to support proactive and coordinated be exposed to higher risks of corrupt activity. These infrastructure fraud and corruption. This strategic integration will responses to existing and emerging threats through efforts have contributed to improved spend control • Background checks conducted on employees streamline processes, improve responsiveness and streamlined, intelligence-driven organised crime and transparency, with notable reductions in high-risk during recruitment processes, to ensure a strengthen consequence management. Tembela Kulu investigations. The focus remains on optimising procurement categories such as LPOs and informal trustworthy workforce was appointed as General Manager: Investigations and remediation efforts by consolidating high-risk cases tendering expenditure, particularly within Generation. Security from 1 October 2024 – she reports directly for investigation as well as addressing the backlog of We are piloting e-tendering for formal tenders to the GCE and is a permanent invitee to Exco. forensic investigations and disciplinary cases against AFS Performance against these shareholder compact and have introduced system enhancements to the measures is disclosed in the directors’ report employees and suppliers. e-auction system to enable greater competition and transparency in pricing. 77 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Fighting crime, fraud and corruption continued ARE WE WINNING THE FIGHT? System enhancements are focused on improving Since inception of the strategy to combat coal, fuel oil guards – to outcome-based contracting that focuses We recognise that our stakeholders want to know automation and exception reporting, modernising and diesel theft in April 2023, over 60 arrests have on performance-based results – such as improved whether we are winning the fight against crime, systems with artificial intelligence and data analytics been made and more than 20 illegal coal swapping security risk mitigation and reduced security breaches. fraud and corruption. The governance reforms capabilities and implementing new systems, such as an sites have been closed. We have also implemented Engagements are underway to equip security teams and measures to safeguard the organisation by integrated governance, risk and compliance system, to specialised security intelligence-led investigations and contractors with the skills to align with outcome- improving Eskom’s capacity to prevent, detect, strengthen risk, compliance and control oversight for to monitor coal samples and coal deliveries by road based principles and ensure awareness and respect of investigate and correct instances of crime, fraud real-time monitoring and assurance. between contracted mines, laboratories, rail sidings human rights. and corruption, together with the operational and and Eskom power stations to improve coal supply financial improvements achieved during the past year, ADDRESSING CRIME AND SECURITY RISKS integrity. Looking ahead, we plan to upgrade the Security demonstrate that we are regaining control. PHYSICAL SECURITY National Control Centre to enhance real-time We continue to collaborate with the Energy Safety Significant progress has been made in advancing monitoring as well as threat detection and response While Eskom has achieved measurable progress on and Security Priority Committee of NECOM to security compliance monitoring and implementation capabilities. We will be modernising security systems these fronts, and is fighting back more effectively expedite criminal cases reported to law enforcement efforts. During the year, we launched a compliance and deploying a security incident management system than ever, the battle is far from over. Further efforts and to combat criminal activities which threaten our self-assessment tool to evaluate adherence to that incorporates a geographic information system, are required to fully sustain the recovery and foster operational sustainability and national energy security. security-related regulatory requirements throughout artificial intelligence and analytical capabilities to behavioural change throughout the organisation. Priority focus areas include the theft of electrical the group. The tool is designed to identify gaps, enhance situational awareness. The Rapid Response The Board is actively shifting the organisation from cable, coal, fuel oil and diesel, as well as threats of capture lessons learned and enhance the quality and Unit will be operationalised and dedicated to reactive and fragmented responses towards proactive sabotage. We have also established an employee consistency of security compliance reporting. timeously address high-priority cases involving and structural prevention measures, through protection programme to create a safe working infrastructure and economic crimes. promoting a culture of accountability, transparency GIS has established a dedicated validation committee environment for employees and contractors exposed and operational discipline. to oversee the procurement and implementation of Altogether, these efforts are expected to enhance to criminal activity. security service contracts to strengthen accountability. the group’s overall security posture, protect critical NEXT STEPS During the year, Eskom recorded 2 647 crime-related We are also transitioning from input-based security infrastructure against security threats and reduce Looking ahead, measures will be focused incidents, resulting in estimated losses of R239 million, contracting – such as a fixed number of security operational vulnerabilities and disruptions. on addressing crime and security risks, the which is a significant improvement from the previous implementation of the fraud prevention plan and year (2024: 3 732 incidents and R379 million losses). enhancing investigative capabilities and consequence A total of 436 arrests were made during the year management processes. (2024: 206), of which five related to employees and 88 related to contractors. These improvements can be These include capacitating oversight functions by attributed to proactive security interventions, including: addressing shortages in specialist skills, establishing • Deployment of security technology at high-risk sites a central contracts management oversight body and broadening the reach of compliance, ethics and • Disruption of criminal operations and infrastructure fraud awareness training. Fraud-related KPIs will be crime networks integrated into executive performance compacts. • Enhanced early detection and response capabilities • Proactive security compliance assessments The establishment of a Data Analytics Centre of and security audits at Eskom sites, with Excellence will enhance monitoring and analytical recommendations addressed through site-specific capabilities. The review of policies, procedures and action plans plans will be expanded to enhance the internal • Strengthened collaboration with law enforcement control environment, drive discipline and improve agencies, including the South African Police Service audit readiness. To prevent future losses, Eskom (SAPS), the Hawks, the Special Investigating Unit will continue to perform revenue recovery audits, (SIU), the SSA and the National Prosecuting enhance detection of conflicts of interest and Authority (NPA), which has bolstered the capability strengthen legal frameworks to prevent restricted to investigate crime, arrest suspects and advance suppliers from doing business with Eskom. prosecution outcomes 78 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Fighting crime, fraud and corruption continued CYBER-SECURITY Eskom’s legacy endpoint security technology had Ongoing investigation into the breach of Eskom’s online vending system Given Eskom’s critical role in the country’s economy not adjusted to new and advanced cyber-security Eskom’s OVS is a critical revenue collection system used for dispensing prepaid electricity tokens to customers. and the continually evolving cyber-threat landscape, threats, which resulted in vulnerabilities in various Following illegal activity relating to prepaid electricity tokens being brought to Eskom’s attention by the Hawks, we are actively enhancing our cyber-security systems. In response, significant progress has been a forensic investigation revealed that the OVS had been compromised for bulk generation of illegal prepaid protection, controls and monitoring to optimise made in enhancing Eskom’s risk-based cyber-security electricity tokens, revealing critical vulnerabilities in both the physical and digital access controls to Eskom’s existing cyber-security capabilities and further strategy. The information security programme has prepaid electricity infrastructure. This breach would only have been possible with collusion between Eskom staff strengthen our defensive capabilities. been strengthened with multiple layers of defence for (who have since been suspended) and illicit operators to circumvent controls. The suspicious activities were enhanced protection, particularly for Eskom's OVS, reported to various law enforcement agencies for further action. In December 2024, an investigation found that an which will assist in reducing potential financial losses. employee had used unauthorised software to capture While the investigation continues, we have established an OVS war room and taken several proactive steps We have also made significant advancements to aimed at mitigating these vulnerabilities and restoring the integrity of the system. These include: user credentials with inappropriate and elevated rights enhance cyber-security protection by replacing legacy to gain access to Eskom’s enterprise financial accounting • Strengthening physical, logical and operational security controls and detection capabilities in the entire OVS endpoint security measures with improved software system, thereby enabling the creation of fraudulent ecosystem, with enhanced management and security protocols such as upgrading internal firewalls, adopting aimed at detecting advanced cyber-security threats. new technologies, successful penetration testing and restricting external access to authorised national vendors payments; these payments were stopped as soon as they were discovered. In response to the breach, However, these measures had not been adequately • Enhancing monitoring capabilities, by tracking unusual activities across the OVS ecosystem, and reporting we established a war room to enhance collaboration rolled out across the group by year end due to mechanisms between the affected business units, including GIS incompatibility or the lack of certification for use with • Identifying and regularising zero buyers through the zero buyers reduction programme and the Group Technology and Information Division, certain operational systems, as well as challenges with • Transitioning the responsibility of the key management centre back to the Standard Transfer Specification and to investigate the breakdown of controls and compliance to SSA requirements for data storage Association to address risks associated with managing the encryption of vending keys oversee the implementation of corrective and outside of South Africa. The Group Technology and • Disconnecting, issuing penalties to and criminally charging customers where meters are confirmed to have enhanced preventative measures as a key focus area. Information Division continues to engage with divisional loaded illegally generated tokens A consequence management process is in progress. and subsidiary operational technology functions to • Investigating ways to block the use of previously generated 600kWh tokens replace or upgrade unsupported or outdated systems • Reinforcing physical infrastructure and limiting both physical and digital access to the OVS The breach limited the ability of the external auditors to reduce the exposure to cyber-attacks. This has been • Accelerating acquisition of a new, more secure software solution for the online vending system to replace the to place reliance on general IT controls over Eskom’s addressed as a priority, with improved detection tools existing system as well as rolling out smart meters financial accounting system, increasing the risk of that add greater levels of security. Processes have also • Collaborating with law enforcement agencies to support the ongoing investigation, with implicated employees material misstatement due to fraud or error and been enhanced to prevent breaches from occurring in having their access revoked and being placed on precautionary suspension pending further review resulting in the need for manual testing of controls the future. • Augmenting in-house capabilities to manage system risks and safeguard operations, supported by an external and additional substantive procedures as part of their IT firm audit procedures. The external auditors also needed • Enhancing cyber-security protection requirements, including updating vending agency agreements to require to assess the impact on their audit opinion of the vending agents to submit independent assurance reports effectiveness of cyber-security endpoint protection as • Implementing a structured change management process for system upgrades well as potential vulnerabilities in certain operational • Maintaining Board oversight through the Audit Committee, with regular reporting on the remediation process technologies. The external auditors were satisfied that the audit procedures performed were sufficient These enhancements are ongoing and were not yet completely effective at year end. Despite this, there has to mitigate the audit risks arising from the internal been a significant reduction in the number of illicit tokens generated because of the interventions underway. IT breach. Factors contributing to the breach are being considered for improvement. These include the over-reliance on and overconcentration of a single external entity in the OVS environment. This is expected to be enhanced AFS Refer to the independent auditor’s report in the once the current service provider is replaced as part of the replacement of the entire online vending system to annual financial statements for further information prevent future incidents. The rollout of smart meters with advanced metering infrastructure from FY2026 aims to replace outdated conventional and prepaid meters. This will assist in combatting illegal vending activities by enabling improved theft and tamper detection. Although the risk remains significant, processes and mitigation strategies to manage the vulnerabilities have been put in place. Our focus remains on strengthening our revenue collection system, improving operational resilience, restoring trust and ensuring that customers can rely on a secure and efficient service. We call on all stakeholders to remain vigilant and report any suspicious activity related to prepaid electricity tokens. 79 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Fighting crime, fraud and corruption continued PROGRESS ON FORENSIC A total of 66 new criminal cases were opened STRENGTHENING CONSEQUENCE The SRC and Exco Tender Committee (ETC) evaluate INVESTIGATIONS during the year. At year end, 247 open cases were MANAGEMENT cases against suppliers, based on their respective registered with SAPS for criminal investigation, of During the year, disciplinary action was recommended authorities, and determine disciplinary action to be which 227 have been referred to the Hawks in terms by GIS against 82 employees, based on findings from implemented. Sanctions include removal from Eskom’s Forensic investigations of PRECCA. Of these, 20 cases were at trial stage at completed forensic investigations. A total of 195 supplier database, referral to National Treasury for various magistrate and specialist commercial crimes disciplinary recommendations relating to current and restriction on the central supplier database or the 9 672 (2024: 7 132) courts and a further 63 cases have been through the criminal proceedings provided for under the Criminal prior years were concluded, assisting in reducing the backlog of cases. implementation of temporary purchasing blocks on Eskom’s procurement system. incidents registered through reporting channels Procedure Act, 1977. We continue to monitor these for assessment on the forensic case management proceedings and support law enforcement agencies in Several interventions have been put in place The status of 43 suppliers was considered by the system their work. to improve the effectiveness of consequence ETC during the year. A total of 25 suppliers received management processes. Eskom’s People Relations sanctions for removal from Eskom’s supplier database, Forensic investigations during the past year revealed Department and GIS are working closely to ensure with referral to National Treasury for restriction. 245 (2024: 195) recurring themes, including procurement and recruitment irregularities, undeclared conflicts of affected employees’ managers act swiftly to address Eight suppliers received suspended sanctions, to be removed from Eskom’s supplier database if any further new cases registered for forensic investigation forensic recommendations. Monthly follow-ups have interest involving both suppliers and employees, resulted in improved monitoring and close out of non-compliance is committed during the suspension and other forms of fraud and corruption, such as long-outstanding disciplinary actions. External support period. Two suppliers have had purchasing blocks 105 (2024: 120) falsification of documents and accepting or offering gratification in exchange for favours. These findings from accredited labour dispute bodies has assisted implemented, pending finalisation of criminal matters, and the remaining eight suppliers were found not forensic investigations concluded in expediting disciplinary hearings by supplementing highlight the need for stronger compliance with Eskom’s internal disciplinary case chairpersons. guilty and recommended for no further action. well-documented policies and procedures and more 520 (2024: 380) robust management supervision and monitoring. Where investigations identify control deficiencies, As reported previously, Eskom revised its employee reference flagging procedures in FY2023 to include Since its first meeting in October 2024, the SRC considered the status of a further 22 suppliers until cumulative cases under investigation at year end, remedial actions were recommended to prevent individuals who resigned to avoid consequence year end. A total of 19 suppliers received sanctions for relating to current and prior years recurrence, although a stronger focus by management management before disciplinary processes or removal from Eskom’s supplier database or blocking is required to prevent repeat audit findings. As investigations could be concluded. Previously, only on Eskom’s procurement system. Two suppliers mentioned, an audit recovery programme is being individuals who were dismissed were flagged on the received suspended sanctions and one supplier was During a forensic investigation, an assessment is database. Individuals who have been flagged cannot found not guilty and recommended for no further implemented to address recurring audit findings and conducted to determine whether the case meets be employed in Eskom for 10 years and cannot serve action. internal control weaknesses. the requirements for reporting to law enforcement as an employee of a contractor on Eskom sites. agencies in terms of the Prevention and Combatting We continue to modernise procurement systems These efforts reflect our commitment to enforcing A total of 84 individuals were flagged during the year of Corrupt Activities Act, 2004 (PRECCA), including to mitigate fraud and corruption risks. Automated ethical conduct and restoring integrity across the (2024: 155). known or suspected fraud and/or corrupt activity that procurement tools, including price check tools, supply chain. Our focus remains on addressing the exceeds an amount of R100 000. digital stock control as well as e-auction and Where forensic investigations confirm that suppliers backlog of supplier disciplinary cases and responding e-tendering systems are being pursued to enhance failed to declare a potential conflict of interest or to new cases as they arise. Eskom is working closely At year end, forensic recommendations for disciplinary engaged in misconduct and have been proven to with the SIU to ensure that appropriate sanctions transparency and control. Another key project is action against 91 employees were yet to be finalised. have benefitted unduly, Eskom initiates a supplier are taken against suppliers found to have defrauded the implementation of coal automation systems to Of these, 60 are awaiting initiation of the disciplinary review process. The supplier review process has Eskom. monitor coal delivery from mines to power stations process by the employees’ manager, 30 disciplinary been enhanced to improve responsiveness and and improve coal quality assurance. These initiatives hearings are underway and one charge sheet has been accountability through the re-establishment of the support our broader digital procurement programme, issued to an employee for finalisation of the matter. Supplier Review Committee (SRC). which aims to transform procurement and supply chain management into an automated and integrated process. 80 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Upholding good governance AUDIT RECOVERY PROGRAMME The programme focuses on three core areas: The programme is targeting the following initiatives STRENGTHENING COMPLIANCE WITH Eskom has launched a structured, three-year audit across the group: LEGISLATION recovery programme to address recurring audit • Reinforce governance and oversight structures Eskom has once again received a qualified opinion findings and qualified audit opinions relating to 1 • Foster a culture of accountability and disciplined relating to the quantification and disclosure of certain the disclosure of PFMA-related information and, execution information required in terms of the PFMA, as the ultimately, improve the organisation’s audit outcomes. • Improve documentation and recordkeeping to associated financial records were not complete The key objective of the programme is to drive streamline execution of internal and external audits or accurately maintained in line with legislative a compliance-centred organisation focused on requirements. The auditors have raised material • Strengthen internal controls, by focusing on regular governance, internal controls and service delivery findings in respect of the lack of completeness and reconciliation and reporting, among others improvements. accuracy of Eskom’s reported PFMA information, Audit • Invest in technology to expand system integration both relating to the current year and cumulative The programme is a direct response to systemic recovery and automation balances. Addressing these issues remains a priority audit challenges that have hindered Eskom’s ability to programme • Build capacity and enhance awareness and training for management and the Board. produce audited financial statements within legislative initiatives deadlines and avoid a qualified audit opinion. 3 2 • Enhance consequence management IR Refer to “Leveraging governance for transformation – The challenges experienced in previous years related • Drive continuous improvement through lessons External audit opinion” on page 60 for more to supply chain management, contract management learned information and irregular expenditure, due to: • Improve communication and stakeholder engagement • Non-adherence to well-documented processes, The impact of these initiatives will be monitored We are actively seeking ways to assess and enhance policies and procedures through continuous reviews, to ensure that gaps are PFMA compliance in line with the compliance risk • Inadequate or ineffective consequent management 1 Closure of audit findings identified and addressed timeously. monitoring plan and to develop a proactive response • Incomplete or inaccurate documentation, which to PFMA-related audit qualifications. This requires This includes focused and consistent tracking An Exco Audit Recovery Oversight Committee, a multi-year approach due to the impact of the is deemed a limitation of scope by the external and closure of existing audit findings that chaired by the GCE, has been established to oversee PFMA and other legislative requirements on the auditors impact the current and future external audits and monitor implementation of the programme, entire organisation. As mentioned, an audit recovery The programme was initiated in December 2024, ensuring executive-level accountability and alignment programme has been implemented to enhance with the immediate objective of identifying the root 2 Execution of external audit with Eskom’s broader governance reforms. governance in supply chain management, with the aim causes of the limitations of scope and non-compliance of proactively identifying non-compliance with the as previously reported by Deloitte, and to drive audit This includes enhancing the approach to To date, enhanced oversight through the audit PFMA and other established processes. process improvements to reduce the number of audit tracking and monitoring the external audit recovery programme has led to the closure of around findings for the year ended 31 March 2025. In the process to ensure transparency and visibility 90% of the external audit findings raised since FY2021 To address the external auditors’ limitation of scope longer term, the programme is designed to strengthen (excluding FY2025 findings), which is still subject findings raised in prior years, efforts were put in internal controls and ensure stronger adherence by 3 Enhancing internal control environment to audit verification. Many of the FY2024 findings place to determine the root causes of the findings by employees to Eskom’s well-documented processes, remain open as the FY2024 audit was delayed and reviewing the population of FY2025 procurement This includes enhancing our combined only finalised in December 2024, leaving insufficient policies and procedures; enhance consequence transactions, including contracts, purchase orders assurance model to ensure that risks and time to adequately address matters prior to the management; address non-compliance with PFMA and local purchase orders. The process required issues, as a result of non-compliance by commencement of the FY2025 audit. and other legislative requirements; enhance audit all procurement documentation for the year under staff to internal controls, are identified and readiness; and enable Eskom to achieve unqualified review to be centrally loaded, with the aim of addressed proactively audit opinions and publish its annual results within reviewing all documentation to ensure completeness. legislated timeframes. This will ultimately support Includes longer-term initiatives that are Out of 26 188 transactions, more than 85% have been rebuilding stakeholder confidence in our governance intended to address the systematic control reviewed to date. Of the 22 668 transactions that and financial reporting systems. deficiencies identified by the external audit have been reviewed, almost 97% were considered process to have some gaps in documentation. Of the 21 923 transactions with gaps, around 78% were satisfactorily addressed. The balance is still being assessed. 81 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Upholding good governance continued Enhancing audit readiness allowed executive DISCLOSURE OF PFMA-RELATED INFORMATION and meeting all requirements for removal of historical An estimated R14.2 billion, of which R13.3 billion management to identify the extent of the gaps National Treasury has granted Eskom a departure irregular expenditure by the Exco Tender Committee. relates to expenditure in prior years, is undergoing the in supporting documentation, which remains a from the requirement of section 79 of the PFMA Regrettably, obtaining the necessary supporting assessment and determination process before it can key concern and will continue to be extensively to disclose amounts inclusive of VAT. We have documents for historical matters remains a challenge. be confirmed and disclosed as fruitless and wasteful monitored in FY2026. Furthermore, processes are historically reported all PFMA amounts excluding We are committed to addressing the root causes of expenditure. being put in place to further digitalise procurement VAT, as recorded in our accounting system, and have past inaccuracies by implementing corrective action to activities. Lastly, this process allowed for the continued to do so in FY2025. ensure accountability. However, we have to balance the Material losses through criminal conduct identification of transactions which could possibly, financial and resourcing costs of these efforts compared Losses due to criminal conduct of R7.2 billion were once assessed, be classified as irregular expenditure, with the benefits of pursuing prior year matters when reported during the year (2024: R6.7 billion), of which IR PFMA information required by National Treasury R7.1 billion related to estimated non-technical energy given that poor document management and non- regulations is disclosed in the supplementary considering where to focus our efforts. compliance with legislation had been established by losses arising from electricity theft, including ghost information from page 155 of this report as well as in the audit recovery teams as the main root causes of As a result of the effor ts to validate the vending (2024: R6.4 billion). As mentioned earlier, note 51 in the financial statements previous external audit findings. procurement population during FY2025, the investigation into the breach of Eskom’s OVS management determined that full assessment for is ongoing. We are collaborating with other state- Furthermore, the protracted consequence Irregular expenditure non-compliance of all past transactions is deemed owned entities, industry role players, SAPS and the management process creates an environment where At 31 March 2025, the cumulative balance of impractical, for the following reasons: NPA to combat these losses. instances of non-compliances are not dealt with irregular expenditure amounted to R103.9 billion • Volume and complexity of transactions adequately and timeously. This is a key focus area for (2024: R103.2 billion, restated), the vast majority • Inadequate documentation IR Refer to the PFMA disclosure from page 155 for details FY2026. of which relates to historic transgressions. Irregular • Time and resource constraints of disciplinary action and criminal sanctions relating to expenditure incurred during the year totalled irregular expenditure, fruitless and wasteful expenditure We identified instances of non-compliance with the R1.5 billion, with R0.5 billion relating to new matters. • Technological limitations and material losses due to criminal conduct PFMA and associated regulations. A detailed action plan to address the audit qualification has been The balance for the comparative period was With consideration for the factors noted above, developed and implementation is monitored regularly. restated, increasing by R4.6 billion, largely as a management has concluded that our efforts are best focused on enhancing processes, policies and REPORTABLE IRREGULARITIES RAISED BY The plan encompasses clear objectives, timelines result of expenditure in previous years that was THE EXTERNAL AUDITORS and responsible areas, the progress of which is only confirmed as irregular in the current year. An procedures, together with improving communication of requirements through training and capacitating the In accordance with section 45 of the Auditing monitored regularly. Nevertheless, instilling a culture estimated R50.5 billion, of which R37.6 billion relates Profession Act, 2005, Eskom’s external auditors of timely self-declaration and reporting is an area to expenditure in prior years, is undergoing the business to meet reporting requirements to ensure improved compliance with PFMA-related regulations, are required to report any identified reportable that requires enhancement, and implementation of assessment and determination process before it can irregularities (RIs) to the Independent Regulatory associated actions have been initiated early in FY2026. be confirmed and disclosed as irregular expenditure. which will result in improved audit outcomes. Board for Auditors (IRBA), after which the matter The associated initiatives will be actively monitored The process of collecting information and reporting is reported to management to afford them an through the audit recovery programme. During the year, we received notice of condonations on new irregular expenditure will remain a focus area, opportunity to respond to and/or rectify the matter. from National Treasury to the value of R0.4 billion and We are also considering ways to enhance and recovered a further R43 million. Condonations are although it is acknowledged that further instances of past irregularities may be detected as we continue our efforts The Audit Committee acknowledges that certain strengthen internal controls to improve PFMA only granted by National Treasury once the necessary RIs may remain open for extended periods due to compliance, and ensure that individuals responsible for interventions, such as disciplinary processes and to address PFMA compliance and reporting processes. their complexity and the time required to resolve non-compliance with the PFMA are held accountable remedial action, have been undertaken to prevent Fruitless and wasteful expenditure all related aspects. These matters are closely through effective consequence management. recurrence of the irregular expenditure. The closing balance of fruitless and wasteful monitored to ensure that they are addressed through expenditure amounted to R4.1 billion at year end appropriate governance and remedial measures. Mandatory PFMA awareness training will continue Revised processes and controls for dealing with the to be rolled out to employees to ensure that they removal of uncondoned irregular expenditure have (2024: R4.9 billion, restated). The balance for understand their responsibilities and the importance been implemented, to minimise the continued impact the comparative period was restated, reducing AFS Further details on RIs, including actions taken and of PFMA compliance, while communicating key of historical matters on the cumulative irregular by R1.1 billion due to matters being prematurely the status of each matter, are discussed in note 52 changes in the process. A dedicated communication expenditure balance. Approval was received during disclosed as fruitless and wasteful expenditure in in the financial statements channel has been created to enhance communication FY2025 to remove historic irregular expenditure previous years, due to pending arbitration and/or on PFMA-related matters throughout the group. amounting to R0.4 billion. litigation of contractual disputes. Only R20 million was confirmed as fruitless and wasteful expenditure The cumulative balance of irregular expenditure incurred during the year. An amount of R861 million in remains high, mainly due to limited progress in receiving fruitless and wasteful expenditure was written off as the necessary condonations from National Treasury irrecoverable during the year. 82 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Performance overview Condensed annual financial statements 84 Financial review 90 Strengthening our infrastructure 98 Interacting with the environment 110 Growing our people 120 Sustaining communities 127 83 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Condensed annual financial statements The financial results set out in the condensed financial statements that follow have been extracted from the CONDENSED GROUP INCOME STATEMENT financial statements of the Eskom Holdings SOC Ltd group for the year ended 31 March 2025. The financial for the year ended 31 March 2025 statements have been prepared in accordance with IFRS Accounting Standards and in the manner required by the Companies Act, 2008 and the PFMA, 1999. 2025 2024 Rm Rm % Ref The financial statements have been prepared under the supervision of the Group Chief Financial Officer, Revenue 340 895 295 814 15 1 Calib Cassim CA(SA), and were duly approved by the Board of Directors on 29 September 2025. Other income 3 265 1 295 152 Primary energy (150 207) (173 729) 14 2 The financial statements have been audited by the group’s independent auditors, Deloitte & Touche, in Employee benefit expense (43 160) (35 096) 23 3 accordance with the International Standards on Auditing. The independent auditors issued a qualified opinion Net impairment loss and write-downs (7 616) (3 433) 122 4 relating to the quantification and disclosure of certain information required in terms of the PFMA, 1999. Except Other expenses (44 139) (41 441) 7 5 for this qualification, the financial statements are considered to be fairly presented in terms of IFRS Accounting Profit before depreciation and amortisation expense and net fair value and 99 038 43 410 128 6 Standards. Furthermore, the independent auditors have highlighted several matters in their report. One of these foreign exchange (loss)/gain (EBITDA) concerns a material uncertainty relating to Eskom’s ability to continue as a going concern, which is due to its Depreciation and amortisation expense (31 764) (33 239) 4 dependence on Government support, uncertainties related to the achievement of operational assumptions and Operating profit 67 274 10 171 561 the determination of regulated revenue by NERSA, as well as the financial risk associated with municipal arrear Net fair value and foreign exchange (loss)/gain (10 415) 2 644 494 7 debt and energy losses. However, these matters do not affect their opinion. Profit before net finance cost 56 859 12 815 344 Net finance cost (33 092) (38 389) 14 8 AFS T he financial statements, which detail the financial performance of the group and company and accompanying Finance income 6 840 4 859 41 notes, are available online Finance cost (39 932) (43 248) 8 Share of profit of equity- 102 105 3 accounted investees after tax Neither the future performance plans nor strategies referred to in the integrated report have been reviewed or reported on by the group’s independent auditors. Profit/(loss) before tax 23 869 (25 469) 194 Income tax (7 822) (29 546) 74 9 Profit/(loss) for the year 16 047 (55 015) 129 Income/gain increased Income/gain decreased Cost/loss decreased Cost/loss increased 84 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Condensed annual financial statements continued 1. REVENUE Sales volumes per customer category Primary energy production breakdown, % Revenue improved due to a standard tariff increase of 12.74% for the year, 8% <1% 19.4TWh together with a 6.4TWh (3.5%) increase in sales volumes. 2.2TWh (9%) 7.6TWh 3% (1%) (3%) International (4.2TWh ), distributor (2.9TWh ) and commercial 4% (0.6TWh ) customer segments showed the largest increase in sales 8.4TWh volumes. Only the industrial (1.1TWh ) and mining (0.8TWh ) 5% (4%) segments experienced a decline. The growth in sales is largely attributable to our improved generation plant performance, which resulted in a 42% 185.1TWh 2025 2025 (83%) much lower frequency and severity of loadshedding. International sales benefitted from a combination of emergency support and opportunistic sales on a non-firm basis, due to lower rainfall in the region which 14% negatively affected other utilities’ hydropower production. Firm power supply agreements for additional capacity were also concluded with Botswana, Namibia and Zambia during the year. Primary energy cost breakdown (excluding rebate), % The industrial and mining segments have experienced production constraints 23% and poor market conditions, resulting in lower consumption. The increase in R6.6 billion Distributors Industrial Mining Commercial R7.3 billion (4%) embedded self-generation capabilities, mainly in the form of solar installations, Residential Agriculture Rail International (4%) across many sectors has further constrained sales volumes. R45.6 billion Revenue excludes R11.9 billion in net amounts not recognised (2024:  efer to page 148 for the number of customers as well as electricity sales IR R (8%) R8.9 billion), relating to sales to customers – mostly municipalities – that volumes and revenue by category for the past five years failed to meet collectability criteria in terms of accounting standards R91 billion because of a low likelihood of recovery. 2025 (55%) 2. PRIMARY ENERGY Primary energy costs declined despite an 8.7TWh (4.1%) increase in Sales volumes and revenue production, as improved performance at coal-fired power stations required R billion +15.2% Revenue TWh lower production from more expensive OCGT and short-term IPP sources. +3.5% Sales volumes R13.3 billion 400 200 R0.6 billion Furthermore, the resolution of a dispute with SARS for the periods up to (8%) 350 (<1%) 31 August 2024 resulted in the recovery of R9.2 billion in fuel levy refunds, 195 Coal and other generation Nuclear generation 300 the reversal of a R2.8 billion provision relating to previous refunds that no Eskom OCGTs IPPs 250 longer need to be repaid to SARS, and the reinstatement of a process for Electricity imports Environmental levies 190 Eskom to claim for ongoing fuel levies incurred. Collectively, these resulted 200 in a favourable R14.2 billion reduction to primary energy costs for the year. 150 185 SARS will conduct an audit in respect of claims submitted for the periods Coal generation costs grew by 8.6% due to a 7.1% increase in production from September 2024. from coal-fired stations, together with inflationary cost pressures driven 100 in part by a 2.9% increase in the average coal purchase price. 180 50 0 175 2021 2022 2023 2024 2025 Revenue Sales volumes 85 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Condensed annual financial statements continued A combined R17.7 billion was incurred to produce 2.8TWh from Eskom- 4. NET IMPAIRMENT LOSS AND WRITE-DOWNS 8. NET FINANCE COST owned and IPP OCGTs, excluding fuel rebate adjustments (2024: R33.9 billion The increase is largely attributable to Gauteng metros which were Net finance costs decreased due to lower interest on debt securities and to produce 5.1TWh). Year-on-year savings were bolstered by favourable impaired to recognise the increased risk of non-collectability. borrowings and higher income on treasury and insurance investments. diesel price movements during the year; however, the achievement of further A lower average cost of borrowing resulted from favourable interest rate savings was hampered by higher OCGT production in the fourth quarter to 5. OTHER OPERATING EXPENSES movements across global markets. avoid or minimise loadshedding due to plant performance challenges. Repairs and maintenance spend increased to R30.3 billion (2024: R28.7 billion) to address unplanned generation plant losses Average cost of debt 10.36% (2024: 10.90%) Unit cost, R/MWh 2025 2024 % change as well as planned outages through the Generation Recovery Average investment return 8.37% (2024: 8.27%) Coal 546 541 1 Plan, together with higher maintenance on network infrastructure. Furthermore, a year-end adjustment was processed relating to a write- Nuclear 107 113 5 down of the Majuba rail project. Reconciliation of net finance cost, % Eskom-owned OCGTs1 6 084 6 579 8 R billion 2025 2024 change IPPs2 2 357 2 367 <1 IPP OCGTs3 5 870 6 348 8 Repairs and maintenance spend Debt securities and borrowings 32.8 37.3 12 Renewable IPPs 2 189 2 029 8 Derivatives held for risk management 4.7 3.7 27 Generating plant R23.2 billion (2024: R22.8 billion) 2% Provisions 4.0 6.3 36 Other IPP programmes3 833 1 018 18 International purchases2 866 883 2 Transmission network R1.8 billion (2024: R1.1 billion) 59% Other1 4.5 4.0 13 Distribution network R5.3 billion (2024: R4.7 billion) 12% Gross finance cost 46.0 51.3 10 1. The unit cost of OCGTs is calculated based on the gross fuel cost (excluding the diesel levy rebates) for comparability purposes. The unit cost excludes storage and Cost of borrowings capitalised to assets (6.1) (8.1) 24 demurrage costs, but includes environmental levies. 6. EBITDA 2. The unit cost of IPPs and international purchases is based on the full cost of operation, Finance cost 39.9 43.2 8 whereas the unit cost of Eskom-owned generation is based only on the primary The most significant contributors to the improvement in EBITDA were Finance income (6.8) (4.9) 41 energy cost. Given that IPP and international purchases are treated as a variable cost the growth in revenue and the reduction in primary energy costs. A major in Eskom’s accounts, this is considered appropriate. contributing factor was the once-off recognition of the recovery of fuel Net finance cost 33.1 38.4 14 3. The unit cost is calculated on the net amount spent on energy, excluding operating levy refunds, following the resolution of the dispute with SARS. and capacity charges, and after the lease accounting adjustment. 1. Includes finance costs on employee benefit obligations, lease liabilities as well as trade 7. NET FAIR VALUE AND FOREIGN EXCHANGE LOSS and other payables. 3. EMPLOYEE BENEFIT EXPENSE Unfavourable fair value movements were recognised on hedging The increase in employee benefits is mainly due to higher production instruments, associated with credit risk and hedge effectiveness AFS Refer to notes 40 and 41 in the financial statements for further detail on bonuses linked to improved operational performance and the adjustments, as well as exchange rate and interest rate movements. A finance income and finance cost reimplementation of Eskom’s short-term incentive (STI) scheme. The STI fair value loss was also recorded on embedded derivatives arising from scheme amounted to R4.2 billion (including a 13.5% pension component) negotiated pricing agreements (NPAs) with customers due to poor based on full-year results (2024: nil); the production bonus amounted to 9. INCOME TAX ferrochrome market conditions. Refer to the statement of financial position R1.2 billion (2024: R0.4 billion). Further contributing to the increase was In the prior year, a deferred tax asset of R36.6 billion was derecognised on the next page for further information on the embedded derivatives. a 7% remuneration adjustment approved for all employees up to general as a once-off adjustment based on the deferred tax recoverability management level, together with a 3.5% growth in headcount. Decisions assessment conducted. Year-end EUR/ZAR 19.81 (2024: 20.51) around remuneration and benefits take into account our financial challenges and sustainability, in compliance with the conditions attached to the Eskom Year-end USD/ZAR 18.31 (2024: 18.98) AFS Refer to note 14 in the financial statements for further information Debt Relief Act, 2023 as amended, and are based on a holistic view of financial performance, not just employee costs. IR For further detail, refer to “Leveraging governance for transformation – Remuneration report” from page 65 86 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Condensed annual financial statements continued CONDENSED GROUP STATEMENT OF FINANCIAL POSITION at 31 March 2025 2025 2024 1. PROPERTY, PLANT AND EQUIPMENT AND 5. EMBEDDED DERIVATIVES Rm Rm % Ref INTANGIBLE ASSETS Embedded derivatives relate to NPAs with aluminium Assets Additions from capital expenditure and other smelters from August 2021 to July 2031 as well as Non-current assets 744 546 750 872 1 capitalised costs, primarily on generating plant, NPAs with ferrochrome industrial customers from Property, plant and equipment and intangible assets 689 556 684 388 1 1 partially offset by depreciation and a decrease in January 2024 to December 2029. The tariffs under Future fuel supplies 7 639 6 782 13 2 provisions capitalised due to the life extension of these NPAs cater for both commodity prices and Investment in equity-accounted investees Koeberg Power Station for another 20 years. foreign exchange rates that exceed predefined 346 346 – and subsidiaries thresholds simultaneously, with the valuation of the Inventories 15 373 13 297 16 3 2. FUTURE FUEL SUPPLIES embedded derivatives reflecting the remaining benefit Loans receivable 1 583 7 565 79 4 Additions based on contractual agreements entered to Eskom from the upside charge when the thresholds Deferred tax 7 81 91 5 into with coal mines for the right to future coal are exceeded. The downturn in the ferrochrome Embedded derivatives 3 847 10 486 63 Derivatives held for risk management 18 881 6 supplies as well as expenditure incurred on obtaining, market resulted in lower ferrochrome spot prices 13 320 29 Other non-current assets 12 875 9 046 42 enriching and fabricating nuclear fuel assemblies. and reduced consumption forecasts which negatively Nuclear fuel assemblies are transferred to inventory affected the fair value of the embedded derivatives. Current assets 159 474 115 450 38 when received. Inventories 31 084 28 293 10 3 Loans receivable 309 208 49 4 AFS Refer to note 4.1 in the financial statements for the 3. INVENTORIES Embedded derivatives 125 1 315 90 5 valuation assumptions and sensitivity analysis 6 A portion of coal inventory is recognised as non- Derivatives held for risk management 2 025 8 135 75 Trade and other receivables 35 975 7 current, based on the quantity of coal held and normal 41 923 17 Investments 18 925 16 478 15 expected usage patterns at power stations. The overall 6. DERIVATIVES HELD FOR RISK Other current assets 1 322 1 461 10 increase is largely attributable to growth in working MANAGEMENT Cash and cash equivalents 63 761 23 585 170 8 capital requirements, particularly in coal, liquid fuel, Derivatives mainly comprise cross-currency swaps Assets held-for-sale 7 811 – 100 9 nuclear fuel, maintenance spares and consumables in as a hedge for foreign-denominated borrowings. Net 866 322 line with the Generation Recovery Plan. derivative assets declined due to the strengthening of Total assets 911 831 5 Equity the Rand as well as credit risk and hedge effectiveness 4. LOANS RECEIVABLE Capital and reserves 278 345 222 858 25 10 adjustments. Home loans and other loans in Eskom Finance Liabilities Non-current liabilities 478 009 486 657 2 Company SOC Ltd (EFC) have been classified as 7. TRADE AND OTHER RECEIVABLES 11 held-for-sale. Refer to “Assets and liabilities The increase in trade receivables was largely attributable Debt securities and borrowings 351 226 359 692 2 Derivatives held for risk management 27 6 held-for-sale” below. to growth in municipal and metro debt, in part due to 836 2 996 Deferred tax 11 389 10 412 9 the higher tariff for the year. This was partially offset by A municipal payment arrangement has been Contract liabilities and deferred income 34 041 34 687 2 an increase in the impairment of trade receivables based Employee benefit obligations 17 448 13 recognised with City of Tshwane, consisting of a 19 672 on the expected credit loss model. Provisions 47 447 52 561 10 12 five-year interest free loan for the settlement of Lease liabilities 6 598 6 553 1 arrear debt. The arrangement has been assessed as Other non-current liabilities 6 800 5 277 29 a medium to high risk and recognised at fair value, AFS Refer to note 5.1 in the financial statements for Current liabilities 154 871 156 807 1 reflecting the credit risk at acquisition. further information on the credit risk associated 11 with trade and other receivables Debt securities and borrowings 21 429 52 508 59 Loan from shareholder 56 132 32 000 75 13 Derivatives held for risk management 811 566 43 6 Payments received in advance 3 636 4 300 15 Employee benefit obligations 7 584 3 777 101 Provisions 5 829 9 325 37 12 Trade and other payables 54 040 49 664 9 Other current liabilities 5 410 4 667 16 Liabilities held-for-sale 606 – 100 9 Total liabilities 633 486 643 464 2 Total equity and liabilities 911 831 866 322 5 Asset/equity increased Asset/equity decreased Liability decreased Liability increased 87 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Condensed annual financial statements continued 8. CASH AND CASH EQUIVALENTS 11. DEBT SECURITIES AND BORROWINGS Liquidity was bolstered by higher operating cash Debt of R46.4 billion was repaid during the year, offset flows due to the positive EBITDA growth arising from by R8.7 billion debt raised in compliance with the improved operational performance, together with Eskom Debt Relief Act, 2023 as amended, together the recovery of fuel levy refunds from SARS. The with interest, accruals and discounting to present closing cash position would have been significantly value. Foreign-denominated borrowings were also weaker without the R64 billion in Government subject to exchange rate volatility and decreased in support received during the year, which assisted us in Rand terms because of the strengthening of the Rand. meeting our debt servicing requirements. Refer to the Non-current debt is reclassified as current debt as condensed group statement of cash flows on the next maturities fall due. page for further detail on operating, investing and financing cash flows for the year. 12. PROVISIONS The decline is mainly due to the reversal of nuclear 9. ASSETS AND LIABILITIES HELD-FOR-SALE decommissioning and spent fuel provision costs due The Board approved the disposal of the EFC loan book to the life extension of Koeberg Unit 1 for another and interests in Nqaba Finance 1 (RF) Ltd to African 20 years. The long-term operating licence for the Bank Limited. The related assets and liabilities of EFC unit was granted by the National Nuclear Regulator meet the definition of held-for-sale in terms of IFRS. (NNR) in July 2024. 13. LOAN FROM SHAREHOLDER AFS Refer to note 23 in the financial statements for Debt relief support of R56 billion, which was received further information during the fourth quarter, was recognised as a liability at year end as it was only assessed for compliance 10. CAPITAL AND RESERVES with the debt relief conditions after year end and The increase in equity is a result of the R16 billion approved for conversion to equity in June 2025. net profit after tax recorded for the year, due mostly In terms of the Eskom Debt Relief Act, 2023 as to the improved EBITDA performance discussed amended, interest is charged on all debt relief support earlier. Furthermore, shareholder loans of R32 billion received until the related loan is converted to equity. which were still outstanding at 31 March 2024 were approved for conversion to equity by the Minister of Finance and the related shares issued, based on Eskom’s compliance with the conditions of the Eskom Debt Relief Act, 2023 as amended. Of the R64 billion in shareholder loans received during the year, the R8 billion received during the first quarter was approved for conversion to equity by year end; this amount is recognised as other equity as the related shares were only issued after year end. 88 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Condensed annual financial statements continued CONDENSED GROUP STATEMENT OF CASH FLOWS for the year ended 31 March 2025 2025 2024 1. CASH FLOWS FROM OPERATING ACTIVITIES Rm Rm % Ref Net operating cash flows increased by R45.5 billion, mainly due to improved EBITDA performance, together with the recovery of fuel levy refunds from SARS. Given the restrictions of the Debt Cash flows from operating activities Relief Act, 2023 as amended, on borrowings, sufficient operating cash flows are required to fund Profit/(loss) before tax 23 869 (25 469) 194 our investing activities. Free cash flows, measured as operating cash flows less investing cash flows, Adjustment for non-cash items 89 625 79 563 13 improved to R41.6 billion (2024: net outflow of R4.5 billion), yet remain inadequate to meet total debt Changes in working capital (20 128) (13 579) 48 servicing requirements of R79.8 billion. This emphasises the negative impact of an inadequate tariff Cash generated from operations 93 366 40 515 130 path and other challenges on our operating cash flows, resulting in the need for Government debt Net cash from derivatives held for risk management (1 436) 794 281 relief to strengthen the balance sheet. Finance income received 441 412 7 Finance cost paid (26) (4) 550 2. CASH FLOWS USED IN INVESTING ACTIVITIES Income taxes paid (6 400) (1 321) 384 Investing activities relate mainly to capital expenditure on the new build programme, Generation outages and technical plan requirements, as well as the investment in transmission and distribution network Net cash from operating activities 85 945 40 396 113 1 infrastructure. Cash flows used in investing activities Proceeds from disposal of property, plant and equipment and intangibles 292 1 082 73 3. CASH FLOWS USED IN FINANCING ACTIVITIES Acquisitions of property, plant and equipment and intangibles (39 989) (42 577) 6 Financing activities include debt raised of R8.7 billion, offset by total debt servicing outflows of Acquisitions of future fuel supplies (3 388) (2 857) 19 R79.8 billion. Government’s debt relief support of R64 billion was necessary to meet these obligations, Acquisitions of treasury investments (1 397) (1 002) 39 although Eskom did have to fund a portion of the debt service requirements from available funds. Net acquisitions of insurance investments (3 242) (1 735) 87 Payments made in advance (18) (101) 82 Cash used in provisions (216) (135) 60 Net cash from/(used in) derivatives held for risk management 35 (221) 116 Net cash from loans receivable and finance lease receivables 1 055 84 1 156 Dividends received 174 183 5 Finance income received 2 321 2 336 1 Net cash used in investing activities (44 373) (44 943) 1 2 Cash flows (used in)/from financing activities Debt securities and borrowings raised 8 683 23 562 63 Loan from shareholder raised 64 000 76 000 16 Payments made in advance (131) (426) 69 Debt securities and borrowings repaid (46 424) (54 594) 15 Net cash from derivatives held for risk management 4 555 10 992 59 Net cash used in lease liabilities (783) (721) 9 Finance income received 2 217 1 110 100 Finance cost paid (33 364) (35 255) 5 Taxes paid (60) (71) 15 Net cash (used in)/from financing activities (1 307) 20 597 106 3 Net increase in cash and cash equivalents 40 265 16 050 151 Cash and cash equivalents at the beginning of the year 23 585 7 516 214 Foreign currency translation – 6 100 Effect of movements in exchange rates on cash held (63) 13 585 Assets and liabilities held-for-sale (26) – 100 Cash and cash equivalents at the end of the year 63 761 23 585 170 Inflow increased Inflow decreased Outflow decreased Outflow increased 89 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Financial review Financial capital is managed on the basis that our FINANCIAL RATIOS While we have made significant progress during finances and our operations are intrinsically linked. the past year, we continue to face several financial Strong operational performance drives improved Target Target Target Target Actual Actual Actual sustainability challenges arising from an inadequate financial outcomes, while strong financial performance Measure and unit 2028 2026 2025 met? 2025 2024 2023 tariff path and tariff structure; operational ensures the liquidity needed to execute our strategy Company inefficiencies and above-inflationary cost increases and deliver operational improvements. in some areas; losses associated with criminal and Gross electricity revenue per kWh 241.64 206.34 184.24 187.98 165.43 141.38 fraudulent activities; high debt service costs; escalating Over the past year, we have seen a remarkable (including environmental levy), c/kWh arrear municipal and metro debt; as well as liquidity turnaround in operational performance due to Electricity operating costs, R/MWh 1 959.62 1 642.40 1 523.84 1 473.58 1 384.77 1 207.29 pressure from the continued focus on addressing focused implementation of our recovery plans. This Group generation plant performance and expanding network has led to the easing of generation supply constraints infrastructure. and a significant reduction in the frequency and EBITDA, R millionSC 109 494 90 020 67 120 99 038 43 410 34 565 severity of loadshedding. As a result, the group EBITDA margin, % 25.97 25.09 21.27 29.05 14.67 13.32 Our strategy remains focused on addressing these recorded growth in sales and revenue, coupled with Current ratio1 1.24 1.27 1.03 1.04 0.98 0.89 challenges to ensure sufficient liquidity and investment a reduction in primary energy costs, which greatly Free funds from operations (FFO), in sustaining and expanding our infrastructure, to benefitted financial performance and enabled a return 123 435 99 326 64 577 106 073 53 975 43 847 facilitate operational recovery plans and ensure R million to profitability. FFO after net interest paid, R million 102 454 73 438 29 409 74 926 19 830 11 567 the continued performance of our plant. We are committed to the turnaround of Eskom’s financial We achieved a profit before tax of R23.9 billion for 1. Refer to the glossary of terms on page 134 for detail on the current assets and liabilities used in the calculation of the current ratio. and operational performance, by delivering cost the year (2024: loss of R25.5 billion), primarily due to efficiencies and pursuing sustainable solutions to our an improved EBITDA margin. This was supported by These improvements reflect the results of our financial strategy, which places operations at the centre, supported municipal debt and tariff challenges, to ultimately end a 12.74% standard tariff increase, coupled with easing by four interdependent quadrants. Each of these quadrants must function together for Eskom to achieve long- our reliance on Government support. cost pressures and cost recoveries, mostly linked term financial sustainability. to reduced spend on OCGTs and the recovery of ADDRESSING THE TARIFF PATH AND previously disallowed fuel levy rebates from SARS. TARIFF STRUCTURES Overall, we delivered substantial improvements in our An inadequate tariff path has been an ongoing financial ratios and cash flows. challenge since 2006 and is one of the main reasons for our financial constraints, together with operational REVENUE SECURITY AND BALANCE SHEET challenges and the reliance on debt to fund our new ENHANCEMENT OPTIMISATION build programme. In part, the historic reliance on Adequate tariff path R230 billion debt relief debt has been a symptom of insufficient operating Tariff restructuring Dispose non-core assets cash flows to fund capital expenditure because of the Improve income statement New products and services Diversify funding mix inadequate tariff path. Strengthen balance sheet The allowable revenue determined by NERSA must Operations be sufficient to cover the prudent and efficient costs that we incur to supply electricity to customers, while providing a fair return on assets that covers COST EFFICIENCIES MUNICIPAL DEBT our weighted average cost of capital. Therefore, Review cost trajectories and REDUCTION the migration towards a more cost-reflective tariff drive efficiencies Address poor current account path, while considering the affordability of customers and safeguarding vulnerable sectors, has been a key Enhance financial controls payment levels priority for turning around financial performance. Root out crime, fraud and Pursue alternative solutions corruption Enforce legal rights 90 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Financial review continued NERSA’s revenue determination for FY2025 resulted TARIFF PATH FOR FY2026 TO FY2028 TARIFF OUTLOOK REGULATORY CLEARING ACCOUNT in a 12.74% tariff increase and has assisted in migrating We submitted our three-year MYPD 6 revenue The lack of a tariff outlook beyond the three (RCA) DECISIONS RELATING TO PREVIOUS the tariff path to more appropriate levels, positively application to NERSA in August 2024, following years covered by MYPD 6 poses a risk to financial FINANCIAL YEARS impacting our financial performance for the year. That consultation with SALGA and National Treasury. sustainability and the development of appropriate As discussed in previous reports, recent revenue said, the principles of cost-reflectivity have not been The application included a gradual increase in financial strategies, by hampering the ability to plan and RCA decisions by NERSA have not aligned to addressed as NERSA’s decision only allowed for a Eskom’s return on assets to 4%, 5% and 6% for over the longer term – not just for Eskom, but also for the principles of the MYPD methodology. Eskom has 1.58% return on assets, which is far below Eskom’s FY2026 to FY2028, to minimise the impact to our customers. lodged several review applications with the courts to pre-tax, real cost of capital of almost 11%. customers over time. challenge these determinations. The Electricity Pricing Policy, 2008 (EPP) mandates NERSA to determine and publish a long-term price The legal processes for the review applications relating Following a public consultation process, NERSA announced its determination on 30 January 2025, granting path to provide market certainty and facilitate long- to RCA decisions from FY2015 to FY2021 have been allowable revenue that is significantly lower than Eskom’s application. term planning requirements of electricity suppliers underway for several years. In May 2025, NERSA and customers. The EPP indicates that the price agreed to a settlement amount of R40.2 billion MYPD 6 tariff path forecast should cover a reasonable period of not less to finalise these review applications, which was than 10 years and should be updated on a frequent subsequently endorsed through a court order. The Eskom’s allowed revenue NERSA’s allowed revenue basis to signal the overall expected trend in electricity recovery of the settlement amount will be determined Year application NERSA adjustment decision prices. Together with the Minister of Electricity and by NERSA through its governance processes. Energy, we will be engaging with NERSA and other 2026 R445.6 billion R61 billion R384.6 billion stakeholders on a long-term tariff outlook. (36.15% tariff increase) (12.74% tariff increase) 2027 R495.3 billion R85.8 billion R409.5 billion Progress on the RCA applications for FY2022 and FY2023 is summarised below. (11.81% tariff increase) (5.36% tariff increase) Eskom application NERSA decision Progress 2028 R536.8 billion R99.9 billion R436.9 billion RCA decision for FY2022 (MYPD 4) (9.10% tariff increase) (6.19% tariff increase) R23.9 billion in favour R8.1 billion in favour In June 2023, NERSA published the RCA application for of Eskom (submitted of Eskom (approved stakeholder consultation. A public hearing was held in While NERSA maintained the return on assets we application, effectively counteracting the benefit of in April 2023) in July 2024) August 2023 and NERSA was expected to announce a decision applied for, significant adjustments were made to Government’s debt relief package. As a result, we face by December 2023, although this was postponed. An RCA the regulatory asset base (RAB) based on NERSA’s future liquidity challenges and have assessed NERSA’s balance of R8.1 billion in favour of Eskom was approved at NERSA’s Energy Regulator meeting on 30 July 2024. The incorrect assumptions around the replacement value reasons for decision, with the key area of concern reasons for decision was published in March 2025, although of the RAB – particularly, the value of generation being the valuation of the RAB for generation plant. NERSA has yet to determine the timing of the RCA recovery. plant. This decision significantly lowered the overall We submitted a review application to the High Court value of the return and depreciation components in June 2025 to challenge NERSA’s decision, related RCA decision for the FY2023 (MYPD 5) of the allowable revenue formula. Furthermore, to data input errors made by NERSA, incorrect R9 million in favour of R232 million in favour This RCA application was considerably lower than previous Eskom assumed 2% of allowable revenue will not application of the MYPD methodology as well as Eskom (submitted in of customers years due to the revenue variance arising from the negative be collected due to well-documented challenges non-compliance with a previous court order on the January 2024) (approved in impact of loadshedding on sales volumes. NERSA published the associated with customer non-payment – lower than valuation of the RAB. March 2025) application for public consultation in April 2024. The public the actual exposure of around 5% of revenue per hearings planned for August 2024 did not take place due to year – which would need to be recovered through the In August 2025, NERSA approved a settlement limited interest. An RCA balance of R232 million in favour of tariff. NERSA granted no allowance for customer non- totalling R54 billion in response to the court review customers was approved at NERSA’s Energy Regulator meeting payment in its determination, despite our argument application, which was accepted by Eskom. The on 27 March 2025. NERSA published its reasons for decision in that any business would price its product to cater for settlement allocates Eskom additional allowable May 2025, although NERSA has yet to determine the timing of risks associated with bad debts and other losses. revenue of R12 billion for FY2027 and R23 billion for the RCA recovery. FY2028. The recovery of the remaining R19 billion The outcome of NERSA’s MYPD 6 decision places is still to be determined by NERSA. Consequently, The RCA application for FY2024 was delayed due to the late release of Eskom’s financial statements for that year. significant financial strain on the group, resulting the standard tariff increase is estimated to rise from The application has been prepared in accordance with the existing MYPD methodology and will be submitted to in a revenue shortfall of close to R250 billion over 5.36% to 8.76% for FY2027, and from 6.19% to 8.83% NERSA following the necessary governance processes. the three-year period when compared to Eskom’s for FY2028. 91 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Financial review continued RESTRUCTURING OF TARIFFS DRIVING COST EFFICIENCIES Our newly established Strategic Delivery Unit is Existing tariff structures do not accurately reflect A significant focus area of our financial strategy leading the execution of the Cost Optimisation and the true component costs of electricity supply, Changes to tariff structures in FY2026 is improving our financial performance through Revenue Enhancement (CORE) programme. CORE particularly the allocation between fixed and variable The changes to the tariff structures benefit sustainable cost curtailment and efficiencies. During is pursuing an aggressive cumulative efficiencies costs. Furthermore, tariffs need to be modernised customers by supporting the user-pays the year, we established a programme to reduce target of over R50 billion by the end of FY2029. to address the legal separation of Eskom and the principle, fair cost recovery and the removal costs through operational efficiencies and deliver The efficiencies are being targeted through primary restructuring of the electricity supply industry. No of previously unintended subsidies to ensure sustainable revenue growth. energy optimisation, procurement efficiencies, digital structural changes to tariffs were approved by NERSA appropriate market signals. The new tariff transformation and capital productivity, together for FY2025. structures also support the responsible Savings programme, R billion with revenue growth opportunities, which will have a integration of alternative energy sources and direct benefit on Eskom’s operating cash flows. We submitted a revised retail tariff plan to NERSA the transition to a more sustainable electricity 52.2 in September 2024 to propose the restructuring supply industry. 46.7 ADDRESSING ESKOM’S DEBT BURDEN of tariffs for FY2026 to better address the cost 41.8 GOVERNMENT SUPPORT reflectivity of the generation, transmission and Key changes include the introduction of 36.6 Strengthening the balance sheet over time is a key distribution components of electricity supply through unbundled energy charges, to incorporate a component of our financial strategy to ensure Eskom’s fixed and variable charges. generation capacity charge. Residential tariffs long-term financial sustainability. Alongside efforts no longer have an inclining block structure 21.5 to improve our operating cash flows, Government In February 2025, NERSA approved the proposed and Homelight customers will no longer have support remains a key enabler for deleveraging our plan, although the generation capacity charge (GCC) to pay a higher charge for consumption above 21.5 balance sheet. Furthermore, the support provides was approved for phased implementation over three 16.3 350kWh. Homepower tariffs have been 15.1 certainty in meeting debt servicing obligations, so years. The GCC was reduced to 20% of the amount unbundled into separate energy, network that operating cash flows can be made more readily applied for in the first year and 30% of the amount 5.5 5.2 4.9 and administrative charges. Municipal tariffs available for operational and capital expenditure applied for in the second and third years. The result have been consolidated into three tariffs, 2025 2025 2026 2027 2028 2029 requirements. of this decision is that the recovery of fixed costs namely Municrate, Municflex and Public Actual Target Target Target Target Target incurred by Eskom, which is necessary to provide Lighting to simplify bulk electricity purchasing. Cumulative target By 31 March 2025, we have received a total of energy security for all customers, remains largely on Furthermore, the ratios, prices and periods R140 billion in support since implementation of the The shareholder compact target for FY2025 was R5.4 billion. a variable basis. The remaining portion of the GCC of time-of-use tariffs have been adjusted to Eskom Debt Relief Act, 2023 as amended. During revenue (80% for the first year) will be recovered better align the time-of-use signals to the Savings of R16.3 billion were achieved for the year, the year, we received R64 billion in shareholder loans through the variable energy charge. To ensure System Operator while meeting industry, attributable mainly to coal savings and reduced from Government. Of this, R8 billion was received equitable recovery, all customers – including those mining and commerce needs. usage of OCGTs. Unfortunately, these savings were in the first quarter, while we deferred receipt of the procuring energy from third parties – will contribute partially reduced by losses due to electricity theft, remaining R56 billion to the fourth quarter due to our to the approved GCC. coupled with higher spend on employee benefits and improved liquidity position. Similarly, to mitigate the impact of higher fixed maintenance. By year end, the R8 billion loan had been approved charges on residential customers, NERSA approved a For tariff analysis and calculation tools, and to It should be noted that Deloitte has qualified this KPI. for conversion to equity by the Minister of Finance, phased-in approach to the service and administration access the schedule of standard prices and tariff based on our continued compliance with the strategic Regarding an amount of R6.3 billion, the reported charges for Homepower and Homeflex tariffs. These rates, please visit www.eskom.co.za/tariffs conditions attached to the support. The remaining results are deemed to be overstated due to factual charges will be implemented incrementally over three differences as well as their disagreement with the R56 billion was recognised as a liability in the financial years, starting at 33.3% from 1 April 2025. estimates and judgements applied by management statements at year end as it would only be assessed to establish approved baselines for several initiatives. for compliance with the conditions in FY2026. In March 2025, NERSA approved the Eskom Retail Subsequent to year end, the Minister of Finance Tariff and Structural Adjustment (ERTSA) application For a further R1.4 billion savings associated with Generation site-based contracts, they were unable approved the conversion of this amount to equity in for FY2026, which incorporates the approved retail June 2025. tariff plan effective from 1 April 2025. to obtain sufficient and appropriate audit evidence to support the reported results.  efer to the qualification contained in the independent IR R sustainability assurance report on page 153 for further information 92 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Financial review continued CREDIT RATINGS LATEST CREDIT RATINGS Amendment to Government’s debt relief Of this, R40 billion will be provided in March package 2026 (increasing the total support for FY2026 Rating Standard & Poor’s Moody’s Fitch: local currency The Eskom Debt Relief Amendment Act, 2025 to R80 billion), to assist with the redemption of Foreign currency B B2 n/a has been introduced to simplify the final phase of the ES26 domestic bond of around R40 billion Local currency B B2 B the debt relief package and to reduce the burden in April 2026. The balance of R10 billion will be Standalone CCC Caa1 CCC+ on the fiscus. received in FY2029, to assist with the redemption Outlook Positive Stable Stable of the EL28 domestic bond of around R14 billion The final R70 billion, which was originally in May 2028. To cater for assumptions around Last rating action Affirmed Upgrade Upgrade earmarked as a takeover of long-dated debt the delayed disposal of Eskom Finance Company servicing by Government from FY2027, will Last action date 22 November 2024 6 September 2023 23 May 2025 SOC Ltd, the support for FY2024 and FY2025 had be replaced with two advances of convertible previously been reduced by R2 billion in each year. shareholder loans, totalling R50 billion. Fitch affirms our local currency credit rating with a stable Original Eskom Debt Relief Act, 2023 Eskom Debt Relief Amendment Act, 2025 outlook and upgrades our Fitch affirms our credit standalone credit rating from ratings with a stable outlook CCC- 40 May Nov May 78 76 2024 2024 2025 70 64 66 40 40 5.4 5.4 Standard & Poor’s affirms our 10 credit ratings and revises the 2024 2025 2026 2027 2024 2025 2026 2029 outlook from stable to positive Takeover of debt servicing Convertible shareholder loan Amended support Altogether, the debt relief package has reduced from the R254 billion originally envisaged to R230 billion The positive credit rating actions in the recent past BORROWING PROGRAMME because of our improved financial position. are a reflection of our improved operational and The conditions of the Eskom Debt Relief Act, 2023 financial performance and reflect the rating agencies’ as amended, allow Eskom to continue to draw down view that our creditworthiness will continue to on existing facilities in place at 31 March 2023. Any benefit from Government’s support, leading to a additional financing is subject to approval from the Our focus remains on ensuring continued adherence to the conditions attached to the debt relief support, to strengthening of our liquidity position as the balance Minister of Finance. To effectively deleverage our enable conversion of the shareholder loans to equity. This is critical to realise the full benefit of the support and sheet is deleveraged. Furthermore, rating agencies balance sheet, any future borrowings will need to deleverage our balance sheet, thereby reducing debt service costs over time. have acknowledged the strong link between Eskom’s be restricted based on the strength of Eskom’s credit ratings and those of South Africa. Critical to financial position, without placing reliance on further our financial sustainability and further improving our Government guarantees. credit rating profile is addressing the tariff path and non-payment by municipalities. 93 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Financial review continued Total drawdowns from existing facilities with and conventional debt capital market activities SOLVENCY RATIOS development financing institutions (DFIs) and export from FY2028 onwards, averaging R25 billion per Target Target Target Target Actual Actual Actual credit agencies (ECAs) amounted to R8.7 billion for the year, should external funding be required. These Measure and unit 2028 2026 2025 met? 2025 2024 2023 year, against anticipated drawdowns of R11.2 billion. borrowings will be used to fund capital expenditure required for emission reduction, renewable energy Group Over the next five years, we are targeting a generation as well as transmission network expansion. drawdown programme from existing committed DFI FFO as % of gross debt, % 30.02 21.07 13.11 21.85 10.74 9.12 We plan to source these funding needs partly through and ECA facilities of R13.4 billion. Additionally, we FFO (after net interest) as % of gross sustainability-linked bonds in the domestic and 24.92 15.58 5.97 15.43 3.94 2.40 are planning to raise R75 billion in new incremental debt, % international debt capital markets. Cash interest cover, ratioSC 4.86 2.88 1.92 2.76 1.18 1.29 debt through a combination of loans, DFIs, ECAs Debt service cover, ratioSC 1.54 1.69 0.76 1.11 0.46 0.58 Gross debt/EBITDA, ratio 3.76 5.24 7.05 4.90 11.58 13.92 Borrowing programme, R billion 2026 2027 2028 2029 2030 Debt/equity (including long-term provisions), 0.65 1.00 1.40 1.45 1.99 1.88 ratio Committed facilities: DFIs and ECAs 4.2 6.7 1.6 0.9 – New facilities: Debt capital markets – – 25.0 15.0 15.0 New facilities: Loans, DFIs and ECAs – – – 10.0 10.0 Our solvency ratios have improved significantly and interest paid, amounted to R79.8 billion for Total 4.2 6.7 26.6 25.9 25.0 when compared to the prior year, which is largely the year (2024: R89.8 billion). The R64 billion in attributable to the improvement in EBITDA Government debt relief support was used to meet performance and reduction in debt. The debt/equity these obligations, with the remainder funded from DEBT SECURITIES AND BORROWINGS % ratio was negatively affected by the outstanding available liquidity. Our gross debt securities and borrowings balance Net debt, R billion 2025 2024 change balance of the shareholder loan at year end, which (excluding the loan from the shareholder) has was only converted to equity after year end. Debt repayments and interest payments of R193.8 billion decreased to R372.7 billion (2024: R412.2 billion), Debt securities and and R101.8 billion respectively are due over the next five 372.7 412.2 10 mainly due to debt servicing activities, Government borrowings Improving operating cash flows to fund our debt years, based on the existing debt book (excluding future support and the restriction on new borrowings. Loan from servicing requirements on a standalone basis remains borrowings). Debt service outflows of R43.4 billion are 56.1 32.0 75 The strengthening of the Rand also had a favourable shareholder1 a focus for long-term financial sustainability. Debt expected in FY2026. impact on the balance of foreign-denominated Lease liabilities 7.7 7.4 4 servicing outflows, including both capital repaid borrowings. Cash and cash (63.8) (23.6) 170 equivalents2 Payments made in Projected debt maturity profile (net of swaps and excluding future borrowings) at 31 March 2025, R billion A reconciliation of the major movements in debt (0.3) (0.6) 50 securities and borrowings is shown below. advance2 Net derivatives held 100 (13.8) (26.3) 47 Movements in gross debt securities for risk management 2 80 and borrowings R billion Net debt 358.7 401.1 11 Balance at 31 March 2024 412.2 60 1. A total of R64 billion was received during the year, of which Debt raised through DFI funding 8.7 R8 billion was approved for conversion to equity by year Debt repaid (46.4) 40 end. The remaining portion was subsequently approved for Net fair value and foreign exchange conversion in FY2026. (6.0) 20 movements 2. In the table above, assets are reflected as negative amounts. Other1 4.2 0 Balance at 31 March 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046+ 372.7 Capital Interest 1. Mainly comprises interest accruals. 94 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Financial review continued The sizeable increase in debt servicing obligations in borrowing programme) is expected to reduce to a As municipalities account for 42% of our sales, poor Invoiced municipal debt (including interest) and FY2027 and FY2029 are linked to the redemption of more sustainable level of around R300 billion over the payment levels and the non-payment of accounts from percentage of total debt in arrears at 31 March 2025, the ES26 and EL28 domestic bonds in April 2026 and next five years and deleverage the organisation to a this customer segment has a significant impact on R billion May 2028. As mentioned, the amendments to the debt debt/equity ratio below 0.5. Following the debt relief revenue and overall financial sustainability. Defaulting 26% relief package will ensure that Government is able to period, Eskom still has sizeable redemption obligations by municipalities remains a systemic challenge for the assist us in meeting these obligations as they arise. which will have to be serviced from improved operating entire electricity industry. 86% 76 cash flows, which are highly dependent on an adequate Based on financial modelling, our gross debt securities tariff path, maintaining a focus on cost savings and We have pursued a multi-pronged strategy to 85% and borrowings (including incremental debt from the addressing the escalating arrear municipal debt. address this challenge, including negotiating payment arrangements with defaulting municipalities; pursuing 84% our legal rights through the courts; working with 94.6 MANAGING MUNICIPAL DEBT various intergovernmental platforms to resolve the 81% 74.4 KEY DEBT MANAGEMENT INDICATORS AT 31 MARCH 2025 culture of non-payment by municipalities; and assisting 80% 58.5 Target Target Target Target Actual Actual Actual struggling municipalities through active partnering and 44.8 National Treasury’s municipal debt relief programme. 35.3 Measure and unit 2028 2026 2025 met? 2025 2024 2023 We continue to work with our shareholder and Arrear debt as % of revenue, % 9.68 7.89 5.18 6.28 3.95 4.80 National Treasury to identify sustainable solutions. 12.8 15.7 8.8 10.7 11.1 Average debtors days (including 2021 2022 2023 2024 2025 municipalities, Soweto and international n/a 122.35 111.31 107.04 100.03 95.19 Regrettably, arrear municipal debt has continued customers), days1 to escalate, amounting to R94.6 billion at year end Cumulative amounts CAGR Debtors days – municipalities, average (2024: R74.4 billion) and is estimated to increase Arrear municipal debt (including interest) n/a 252.17 225.17 215.65 212.64 179.27 to R329 billion by 2030, assuming capital growth is debtors days1 Debtors days – large power top curbed and does not exceed the assumed tariff path. Municipal debt has increased by an average of 26% customers excluding disputes, average n/a 16.27 16.43 15.13 15.47 14.48 Resolving the historic arrear debt challenge, collecting per year from 2021 to 2025, outpacing revenue debtors days1 the revenue owed to us and preventing future growth growth, which averaged around 14% per year. The Other large power user debtors days in overdue amounts are critical to improving operating number of municipalities with an arrear debt balance n/a 15.60 16.01 14.86 16.48 16.28 (<100GWh p.a.), average debtors days1 cash flows and, ultimately, our financial sustainability. of more than R100 million has increased to 75 at Debtors days – small power users 31 March 2025 (2024: 69). Around 76% of the arrear n/a 47.82 47.30 45.89 45.19 46.19 excluding Soweto, average debtors days1 debt is owed by municipalities and metros in the Free Payment levels, %SC 92.00 92.00 94.00 93.86 94.91 95.03 State (27%), Mpumalanga (27%) and Gauteng (22%). 1. Debtors days are based on amounts processed on our billing system, and are shown before considering adjustments relating to non- collectability. Therefore, the amounts may not agree with those disclosed in the financial statements. No targets have been approved for FY2028 and are therefore shown as not applicable. AFS For details of debtors by category, including impairment and carrying values, refer to notes 5.1.1 and 20 in the financial statements 95 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Financial review continued MUNICIPAL DEBT RELIEF PROGRAMME Debt relief for the other nine municipalities (Rand The top 10 defaulting municipalities (including metros) owed arrear debt of R56.7 billion at year end, National Treasury implemented its municipal debt West City, Matzikama, Beaufort West, Dawid Kruiper, which constituted 60% of total arrear municipal debt. relief programme from 1 June 2023. The objective Kannaland, Cederberg, Mogale City, Nama Khoi and of the programme is to resolve the poor payment Bela-Bela), with combined write-offs of R0.5 billion, Municipality, R million 2025 2024 % change levels of municipalities and improve their settlement was approved by National Treasury by year end, given 1. Emalahleni Local Municipality, Mpumalanga of current accounts over time, thereby leading to an the municipalities’ compliance with the conditions for 10 280 8 510 21 improvement in our operating cash flows. the first 12-month cycle. These write-offs have been 2. Maluti-a-Phofung Local Municipality, Free State 8 823 7 976 11 processed by Eskom, following governance processes. 3. Emfuleni Local Municipality, Gauteng 8 227 7 065 16 Regrettably, the programme has delivered 4. Matjhabeng Local Municipality, Free State 6 433 5 761 12 disappointing results to date. By 31 March 2025, After year end, National Treasury approved debt 5. City of Tshwane Metropolitan Municipality, Gauteng 5 655 3 117 81 63 out of the 71 municipalities were still failing to relief for an additional ten municipalities (Ubuntu, settle their current accounts as they fall due. Amahlathi, Umsobomvu, Ramotshere Moiloa, 6. Govan Mbeki Local Municipality, Mpumalanga 5 483 4 479 22 Makana, Msunduzi, Sol Plaatje, Raymond Mhlaba, 7. City of Johannesburg Metropolitan Municipality, Gauteng 4 402 1 075 309 After a municipality has demonstrated compliance with Endumeni and Siyancuma), with combined write-offs 8. Lekwa Local Municipality, Mpumalanga 2 670 2 190 22 the conditions of the programme for 12 consecutive of R0.6 billion. Governance processes are underway 9. Ngwathe Local Municipality, Free State 2 428 2 009 21 months, National Treasury will request Eskom to write before these write-offs will be processed in FY2026. 10. City of Matlosana Local Municipality, North West 2 278 1 750 30 off one-third of the municipality’s ring-fenced arrear debt balance outstanding at 31 March 2023. If fully complied with, the programme aims to fully write off the arrear municipal debt over a period of three years. Debt relief write-offs do not affect our Of recent concern is the growth in arrear debt The High Court ordered CoJ to settle its outstanding By year end, National Treasury had requested Eskom profitability as the arrear amounts have from metros, particularly in Gauteng. The arrear debt, although CoJ appealed the matter and disputed to write-off one-third of the ring-fenced arrear debt been fully provided for; they were either debt owing from City of Tshwane (CoT) and City of the amounts billed by Eskom. In November 2024, for 14 municipalities, with the requested write-offs not recognised as revenue or a receivable to Johannesburg (CoJ) has continued to escalate – we Eskom served a notice of intent to interrupt power totalling R3.5 billion. begin with, due to the accounting criteria for are engaging with these metros and pursuing our supply to CoJ. Following an engagement between collectability not being met, or they had been legal rights through the courts. On a positive note, CoJ, Eskom and the Minister of Electricity and Energy, Five of these municipalities (Emfuleni, City of impaired. the arrear debt for City of Ekurhuleni decreased to the notice was withdrawn, subject to CoJ settling Matlosana, City of Mbombela, Mangaung and R0.5 billion at 31 March 2025 (2024: R1.6 billion) and its current accounts and to allow an independent Ulundi), with combined write-offs of R3 billion, were was settled in July 2025. evaluation of the disputed billing, which was concluded pending possible termination from the programme in February 2025. We reached an agreement in June due to non-compliance with the conditions. Eskom CoT and Eskom concluded a five-year payment 2025, with the metro required to pay R3.2 billion over had therefore not processed the write-off for arrangement plan in December 2024, which CoT the next four years to settle its outstanding debt. these municipalities by year end. National Treasury is honouring. The payment arrangement is subject subsequently issued an amendment to the municipal to CoT settling its current accounts on time, failing debt relief conditions in August 2025, allowing for which the arrear debt owed will become payable a municipality to catch up on outstanding payments immediately. after the close of the first 12-month cycle; accordingly, these write-offs will be processed in FY2026, following Eskom’s governance processes. 96 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Financial review continued Regrettably, the municipal debt relief programme While awaiting the outcome of these discussions, Distribution agency agreements framework is not achieving the expected improvement in we are proactively engaging with municipalities to current account payment levels by the majority conclude DAAs on a voluntary basis. In parallel, We have offered active partnering agreements to support municipalities faced with systemic of the participating municipalities. Furthermore, Eskom is engaging with the Development Bank of challenges that inhibit them from adequately fulfilling the duties of their distribution license. These the conditions of the programme prohibit us from Southern Africa to conclude a memorandum of agreements relate to the provision of technical services, including maintenance of infrastructure, as pursuing action against defaulting municipalities understanding to collaborate on efforts to address well as credit management services. However, participation in active partnering is voluntary, with for the duration of the programme. Only once a municipal debt challenges and the implementation of only six municipalities electing to participate by year end. By 30 June 2025, this had declined to four municipality is removed from the programme, will DAAs. municipalities – Emfuleni, Msunduzi, Maluti-A-Phofung and Bela-Bela municipalities. we be allowed to resume our credit control and debt management policies, as well as any legal proceedings. The escalating municipal debt continues to Raymond Mhlaba appointed a new service provider for the prepaid services that Eskom was providing, We have requested National Treasury to engage jeopardise Eskom’s legal separation, by threatening terminating their agreement on 30 June 2025. The agreement with Phumelela evolved into a full with municipalities to implement remedial action or the financial viability of the separate Distribution handover from 1 May 2025, incorporating the Warden and Ezenzeleni areas into Eskom’s licensed remove them from the programme should they fail company. If the challenge is not addressed, this areas of supply, following NERSA’s approval in February 2025. to rectify the breach, although no municipalities have may require an extension to the timelines for legal We are intensifying our efforts and engaging with Government to encourage municipalities been removed to date. separation of Distribution as well as further reliance participating in the municipal debt relief programme to enter into distribution agency agreements on Government support beyond the debt relief (DAAs) with Eskom, to benefit from the full scope of active partnering. We are also discussing the We have proposed alternate solutions for period. The municipal debt challenge requires a option of Government compelling defaulting municipalities with serious payment challenges to enter Government to consider for defaulting municipalities, multi-stakeholder approach. We will continue to into DAAs to improve their outlook. DAAs will support municipalities in providing sustainable local some of which may require legislative amendments, support municipalities participating in the debt services, while also contributing to Eskom’s financial sustainability through improved billing and revenue including: relief programme, as well as actively partner with collection. • Compelling municipalities to enter into DAAs with municipalities to improve service delivery and Eskom revenue collection. We are engaging at various inter- • Implementing prepaid or credit-limited electricity governmental platforms to address the sustainability supply agreements for defaulting municipalities challenges affecting municipalities and drive reform across the electricity distribution industry. • Paying a portion of defaulting municipalities’ equitable share directly to Eskom or withholding equitable share payments to municipalities that fail to settle their Eskom accounts • Increasing the kWh allowance for free basic electricity, with national funding paid directly to Eskom • Reforming the electricity distribution industry model and addressing legacy challenges, including the culture of non-payment 97 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure Eskom’s infrastructure forms the foundation of South an additional 20 years, and the installation of more than To safeguard the integrity of the national grid, the Generation Recovery Plan since March 2023, delivering Africa’s electricity supply, supporting the country’s 2 600km of new transmission lines and 17 750MVA System Operator maintains sufficient reserves sustained and ongoing structural improvement in the growth and development. Over the past year, we have of transformer capacity over the next three years. at pumped storage and open-cycle gas turbine performance and availability of our generation fleet. focused on recovering performance at our generation Distribution will target the rollout of 7.2 million smart (OCGT) stations to respond effectively to unplanned Unplanned unavailability averaged below 12 500MW fleet and modernising our transmission and distribution meters and 250 microgrids over the next five years to breakdowns. When demand exceeds available for the year, below the base-case assumptions under networks, while also accelerating the integration of support demand flexibility, reduce energy losses and supply and emergency reserves have been depleted, the Winter and Summer Outlook. renewable energy sources. Our efforts are guided by a enable customer-centric services. We are investing in loadshedding and load curtailment are essential tools for preserving system stability and preventing a grid commitment to reliability, resilience and sustainability, battery energy storage systems and research-driven By midnight on Thursday 30 January 2025, we collapse. While we are committed to consistently ensuring that our manufactured capital continues to innovation, and we aim to add at least 2GW of clean had achieved 310 consecutive days without overcoming the need for loadshedding, these measures deliver value in a rapidly changing energy landscape. energy capacity under Eskom Green over the next five remain vital to averting the greater threat of a regional loadshedding since its suspension on 26 March years while maintaining system reliability and affordability. or national blackout. Regular testing of the various 2024, a milestone last reached in June 2018. This year saw the commercial operation of Kusile Unit 5, defence systems ensures our resilience in responding to adding 799MW of new capacity to the grid, as well Our infrastructure strategy is anchored in reliability, a major unplanned event or series of events. as the synchronisation of Kusile Unit 6. The return to adaptability and innovation. By strengthening our core Due to a significant easing of generation supply service of Medupi Unit 4 in July 2025 marked a critical assets, embracing new technologies and fostering SYSTEM PERFORMANCE constraints, loadshedding for the year was limited to step in restoring base-load reliability. Through NTCSA, partnerships, we are building a power system that The performance of our coal-fired power stations has 13 days in total (2024: 329 days), a dramatic reduction we also commissioned new high-voltage transmission can meet South Africa’s current and future needs of a shown marked improvement over the past year. This from the prior year. These instances were confined lines and transformer capacity, to support grid stability stable, reliable and affordable supply of electricity. Our was driven by ongoing focused implementation of the to four separate and isolated incidents during the final and enable the connection of independent power progress this year demonstrates the organisation’s quarter of FY2025. producers and cross-border imports. The rollout of resilience and capacity for transformation, laying the smart meters to customers and the successful recoding foundation for sustainable growth and energy security of millions of prepaid meters have enhanced customer in the years ahead. Root causes of recent loadshedding incidents service and helped to improve revenue collection and reduce non-technical losses. MANAGING ELECTRICITY SUPPLY AND Management has conducted a root cause analysis of • Human factors and skills deficits, with fatigue DEMAND the events contributing to the loadshedding during the and stress, leadership gaps and procedural non- Despite these achievements, our ageing infrastructure THE ROLE OF THE SYSTEM OPERATOR final quarter of FY2025 and identified interventions compliance leading to operational errors faces persistent challenges. High utilisation rates NTCSA’s System Operator plays a critical role in to prevent a recurrence of these issues. The Board’s • Procurement and process inefficiencies, with have accelerated wear and tear, requiring sustained maintaining the stability and reliability of South Africa’s Business Operations Performance Committee has delays in ordering international spares and investment in refurbishments and predictive electricity grid. Operating within a narrow frequency provided input into the process. registering new suppliers negatively affecting maintenance. Non-technical and technical energy losses band between 49.85Hz and 50.15Hz, the System outage timelines remain elevated, driven by equipment theft, illegal Several main causes were identified: Operator ensures a continuous balance between real- connections and network inefficiencies. The grid is under • Escalation in unplanned breakdowns and delays in The employee-related challenges include the time electricity supply and demand. This is achieved pressure due to delays in bringing new IPP capacity returning units from outages, including Koeberg impact of prolonged stress and fatigue due to the through optimally dispatching available generation online as well as regional droughts reducing power Unit 2 and Medupi Unit 4, as well as the delayed constant pressure to meet production targets, capacity, while adapting to the challenges posed by the imports, necessitating increased reliance on expensive first synchronisation of Kusile Unit 6 requiring excessive levels of overtime; inadequately intermittent nature of non-dispatchable renewable OCGTs. Human factors, including skills shortages and • A seasonal increase in PCLF due to higher skilled resources; lack of guidance due to leadership energy sources such as wind and solar. fatigue, have also impacted operational performance. summer maintenance, coupled with reduced vacancies; and even complacency and negligence in South Africa’s journey to incorporate variable imports due to challenges at Cahora Bassa some instances. To address these risks, we have refocused the renewable energy sources requires adaptation to • Extreme weather-related disruptions, with some Generation Recovery Plan, integrating people, plant This root cause analysis has informed refinement protect the national grid. Wind generation, for stations impacted despite rain readiness plans, and process interventions and deepening collaboration leading to the Generation Operational Reliability instance, can fluctuate by as much as 2 000MW with others affected by multiple unit shutdowns with international utilities and original equipment and Sustainability Plan, with a strategic shift toward from one day to the next, particularly during winter and excessive load losses manufacturers. The Transmission Development Plan long-term reliability and sustainability. The plan now cold fronts – this causes a sharp rise demand in the • High demand variability caused by unpredictable sets out an ambitious strategy to construct thousands integrates people, plant and process interventions, densely-populated Gauteng, coupled with a decline renewable energy contribution (including behind- of kilometres of new transmission lines, unlocking supported by international utility partnerships in wind output in the southern regions. When this the-meter solar PV) led to excessive utilisation of grid capacity for new generation. Looking ahead, we and enhanced governance structures. We remain coincides with lower solar PV output due to cloud emergency resources are prioritising the commercialisation of Kusile Unit 6, focused on consistently overcoming the need for cover, the system experiences a compounded supply the completion of the long-term operation project at loadshedding as a steppingstone to longer-term constraint. These dynamics require agile system Koeberg to extend the nuclear power station’s life by uninterrupted power supply. management and robust emergency reserves. 98 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued The energy not supplied due to loadshedding decreased significantly to Loadshedding implemented during the financial year, days below 0.4TWh (2024: 13.2TWh). This equates to a total loadshedding duration of 175 hours, or about one week of continuous interruption 2025 2024 during the entire year (2024: 6 367 hours, or almost 38 weeks), a substantial improvement against the prior year. Stage 1 4 Stage 1 4 Loadshedding and load curtailment over the past five years, Stage 2 3 Stage 2 62 GWh and days Stage 3 7 Stage 3 122 329 280 Stage 4 1 Stage 4 66 State 5 20 State 5 20 Stage 6 2 Stage 6 55 IR F or more on the use of Eskom and IPP-owned OCGTs to meet demand during periods of constraint, refer to “Use of open-cycle gas turbines” 13 476 13 215 65 47 Renewable IPPs produced 17.4TWh to support the power system stability The System Operator anticipates continued improvement in system throughout the year (2024: 17.9TWh). Solar PV provided essential reliability with the addition of dispatchable capacity, particularly 1 605 354 13 daytime support, while wind generation provided additional capacity to from Medupi Unit 4, Koeberg Unit 1 and Kusile Unit 6 after the unit 1 034 meet demand over evening peaks. synchronised to the grid. However, the structural shortfall in base-load 2021 2022 2023 2024 2025 generation capacity of 4 000MW–6 000MW remains a critical risk DEMAND TRENDS AND EMERGING RISKS until additional generation capacity is fully integrated into the grid. In GWh curtailed (estimate) Days Despite an increase in energy availability, sales volumes rose by only 3.5% support, NTCSA is expediting the Transmission Development Plan to against the prior year. This can be attributed in part to the continued enable greater integration of renewable energy sources and IPPs into This improvement was supported by: impact of behind-the-meter embedded self-generation, mainly through the national grid. • Kusile Units 1, 2 and 3 returning to service using temporary stacks until rooftop solar PV installations across many sectors. While the increase the permanent stack had been completed in renewable energy sources supports the country’s decarbonisation • Kusile Unit 5 achieving commercial operation on 30 June 2024 objectives, it introduces volatility as discussed earlier and erodes our • Koeberg Unit 2 returning to service at the end of December 2024 from revenue base. Sales volumes also remain suppressed due to the persistent a long-term operation outage to replace the steam generators impact of electricity theft through illegal connections, meter tampering • Kusile Unit 6 being synchronised to the grid in March 2025, with and the use of illegal electricity tokens on prepaid meters. The impact of commercial operation achieved on 29 September 2025 electricity theft is estimated at 14.9TWh for the year (2024: 13.9TWh), accounting for almost 8% of sales. Despite these gains, the system continued to experience periodic constraints due to lower production than anticipated by renewable IPPs, coupled with a reduction in cross-border imports due to the regional drought limiting hydroelectric supply. 99 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued Target Target Target Target Actual Actual Actual Target Target Target Target Actual Actual Actual Measure and unit 20281 2026 2025 met? 2025 2024 2023 Measure and unit 20281 2026 2025 met? 2025 2024 2023 OCGT production, GWh 2 536 1 269 1 899 2 176 3 634 3 018 Energy availability factor (EAF), % SC 74.00 70.00 65.00 60.60 54.56 56.03 OCGT diesel usage, R million2 19 033 9 028 15 551 13 316 23 873 21 355 Planned capability loss factor (PCLF), % SC 10.50 10.50 10.50 12.76 12.04 10.39 Unplanned capability loss factor (UCLF), % 14.00 18.00 23.00 26.05 32.34 31.92 IPP OCGT production, GWh 1 058 528 792 662 1 509 1 098 Other capability loss factor (OCLF), % 1.50 1.50 1.50 0.59 1.06 1.66 IPP OCGT cost, R million 8 451 3 783 4 463 4 374 10 054 8 287 Partial load losses, average MW n/a n/a n/a n/a 5 913 6 615 6 057 1. The 2028 target is the cumulative target over the next three years. 2. The OCGT cost includes diesel storage and demurrage costs of R151 million (2024: R95 million; 2023: R104 million) incurred when not Post-philosophy outage UCLF, % n/a n/a n/a n/a 29.69 31.61 35.75 utilising the OCGTs. Boiler tube failure rate (12-month moving n/a n/a n/a n/a 2.31 2.37 2.17 average), number Unplanned automatic grid separations USE OF OPEN-CYCLE GAS TURBINES developments, alongside the anticipated return of n/a n/a n/a n/a 699 593 736 (UAGS trips), number Open-cycle gas turbines (OCGTs) continue to play Medupi Unit 4 and Koeberg Unit 1 during FY2026, a vital role in our operational strategy, providing are expected to further stabilise the system and 1. Future targets shown as n/a are dependent on system performance. essential support during periods of constrained supply. reduce the need for emergency generation. While OCGTs are significantly more expensive than GENERATION PERFORMANCE Successful execution of the Generation Recovery other generation sources, their strategic deployment In the final quarter of FY2025, reliance on OCGTs To meet the country’s energy demands and provide Plan, combined with interventions under the has been instrumental in reducing the need to increased, primarily due to the underperformance of electricity at a reasonable price, we continue to President’s Energy Action Plan overseen by the implement loadshedding, particularly during periods coal-fired power stations, along with lower output operate 30 base-load, mid-merit, peaking and National Energy Crisis Committee (NECOM), have of high unplanned unavailability and delays in returning from renewable IPPs and lower electricity imports, renewable power stations, with a total nominal led to a significant improvement in the reliability, generation capacity to service. with a combined shortfall of 5.5TWh for the year. capacity of 46 866MW. The 100MW Sere Wind Farm efficiency and availability of the coal-fired generation Although OCGT production is essential to alleviate and four small hydroelectric stations are included in fleet over the past year. The recovery in generation Eskom and IPP-owned OCGTs generated a supply constraints and consistently overcome this capacity, although these are not considered for plant performance was made possible by improved combined 2 838GWh during the year (2024: the need for loadshedding, it is significantly capacity management purposes. The median age of risk management; increased focus on ancillary plant 5 143GWh), reflecting improved base-load generation more expensive than other generation sources. our coal-fired stations exceeds 40 years. performance, spares availability, quality of outage performance resulting in lower usage of emergency Consequently, despite forming a necessary execution and skills; and involving original equipment resources. This output was achieved at load factors of component of our short-term energy security manufacturers (OEMs) when executing planned 10.3% and 7.5% respectively (both against a budgeted  etailed information on the installed and nominal IR D strategy, the use of OCGTs will be progressively capacity of our power stations, as well as IPP capacity, maintenance. load factor of 9%), with expenditure on OCGTs totalling R17.7 billion for the year (2024: R33.9 billion), curtailed to ensure long-term financial sustainability is set out on pages 145 to 146 delivering substantial savings against the prior year and alignment with our decarbonisation objectives. and directly benefitting the bottom line. Favourable Looking ahead, we have budgeted for a 6% load factor on both Eskom and IPP-owned OCGTs for FY2026, TECHNICAL PERFORMANCE diesel price movements added to the gains from the We use a range of performance indicators to monitor improved operational performance. with a further reduction to 3% from FY2027 onwards, rising again to 5.5% in FY2030. This trajectory aligns the health and reliability of our generation fleet: The reduction in reliance on OCGTs was made with the expected improvement in generation plant • Energy availability factor (EAF): Measures the possible by the return to service of key generating availability due to the continued implementation of percentage of time the plant is available to generate units, including Kusile Units 1, 2 and 3, the commercial the refocused Generation Recovery Plan, together electricity operation of Kusile Unit 5 and the synchronisation with the commissioning of new renewable and • Planned capability loss factor (PCLF): Reflects the of Kusile Unit 6 as discussed earlier. These dispatchable IPP capacity. proportion of capacity unavailable due to planned maintenance • Unplanned capability loss factor (UCLF): Captures capacity lost due to unplanned outages or breakdowns • Other capability loss factor (OCLF): Accounts for losses outside of operational control, such as environmental or external constraints 100 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued Average plant availability (EAF) at 60.60% for the EXECUTING PLANNED MAINTENANCE This performance gap highlights the need for Average partial load losses of 5 913MW are year is significantly higher than the previous year Execution of planned maintenance improved continued improvement in the quality of outage significantly lower than the previous year (2024: (2024: 54.56%), although still below the shareholder year-on-year in FY2025, exceeding the target. This planning and execution to improve post-outage 6 615MW), thereby contributing to the improved compact target of 65%. The improvement in plant reflects our continued commitment to restoring the performance. We are addressing these challenges system performance. Nevertheless, these losses availability is largely due to a notable decrease of reliability of our generation fleet through disciplined through: contributed 12.79% to UCLF (2024: 14.21%), around 4 000MW (about four stages of loadshedding) maintenance practices. • Enhanced outage readiness protocols accounting for half of total unplanned losses. Outage in unplanned losses (UCLF) to 26.05% (2024: • Improved contractor performance management slips also reduced significantly, contributing 1.98% 32.34%), coupled with a decrease in other load losses Outage planning is informed by system capacity to overall UCLF (2024: 3.56%), despite post-outage constraints, plant-specific risk profiles, and the • Root cause analysis of post-outage failures (OCLF) to 0.59% (2024: 1.06%). Planned maintenance UCLF decreasing marginally as discussed above. (PCLF) increased to 12.76% (2024: 12.04%) due to availability of critical spares and skilled resources. • Increased investment in midlife refurbishments and Unit trip performance has deteriorated, with ongoing efforts under the Generation Recovery Plan A total of 69 outages were scheduled for the year. critical spares 699 trips during the year (2024: 593). Generation has to improve the performance of the generation fleet By year end, we had successfully completed 36 outages, established the Trip Reduction Forum to identify and 12 were in execution, 18 had been deferred to the These efforts are integral to the Generation Recovery over the longer term through focused maintenance. Plan and are expected to contribute to sustained monitor trends and significant concerns in areas with Instantaneous EAF exceeded 70% on several days coming year and three had been cancelled, with the high numbers of trips; plant running outside reliable required work completed under alternative outage improvements in plant availability and overall fleet during the year, with UCLF at times falling below 20%. reliability in the years ahead. operating limits is identified to prevent avoidable trips. windows. In addition to the scheduled programme, The improved performance also reflects the we executed 51 short-term corrective maintenance ADDRESSING UNPLANNED LOSSES The boiler tube failure rate (failures per unit per year) successful return to service of key units, including outages. These interventions were implemented to Addressing excessive levels of unplanned unavailability improved slightly to 2.31 for commercial units using a Kusile Units 1, 2 and 3 and the commercial operation mitigate emerging risks and prevent potential availability remains a critical challenge, despite intensified 12-month moving average (2024: 2.37), with boiler tube of Kusile Unit 5 on 30 June 2024, which will become losses, underscoring the agility of our maintenance efforts under the Generation Recovery Plan. UCLF failures contributing 2.77% to UCLF (2024: 2.97%). The official for measurement purposes one year later, teams in responding to dynamic plant conditions. has improved compared to the previous year, due boiler tube failure rate seems to have stabilised after from 1 July 2025. Medupi’s five operational units to a reduction in both full and partial load losses. an upward trend over the past five years, attributable achieved an average EAF of close to 70% for the year, In recent years, outage performance and recovery to the maintenance backlog during that period that plans have been hampered by the late release of funds Nevertheless, persistent issues continue to drive underscoring the benefits of resolving major new- elevated levels of UCLF. resulted from constrained capital funding. build defects. caused by Eskom’s constrained liquidity position. This had a ripple effect on outage readiness for Contribution to UCLF, % However, the generation fleet continues to operate activities such as the ordering of spares and other under considerable strain. The average energy long-lead materials, issuing of task orders and finalising 1.59 Four stations achieved a failure rate less than utilisation factor (EUF) for coal-fired stations the integrated schedule. The situation improved or equal to one failure per unit per year, remained elevated at 91.85% (2024: 96.51%), well considerably during the year due to better liquidity 2.71 these being Camden, Kendal, Medupi and above the international norm of around 75% for levels driven by financial support received under Tutuka. a fleet of this age. This high utilisation rate, while Government’s debt relief programme. This situation 1.87 necessary to meet demand in the shorter term, aided decision-making on the use of cash from Three stations recorded a failure rate accelerates wear and contributes to increased operations towards outage planning knowing that 26.05% 12.79 between 1 and 1.8 failures per unit per year, unplanned outages in the medium to longer term. debt servicing is covered by the debt relief support. namely Matimba, Kriel and Kusile. These performance trends highlight the importance POST-OUTAGE PERFORMANCE of sustained investment in midlife refurbishments, Post-outage performance remains a key focus 7.09 predictive maintenance and digital diagnostics to area. The post-outage UCLF – measured over extend asset life and improve reliability. We must a 60-day period following unit synchronisation also reduce EUF to sustainable levels by adding new Partial load losses Full load losses after maintenance – was recorded at 29.69% dispatchable capacity and improving plant reliability. (2024: 31.61%), remaining significantly higher than Outage slips Boiler tube leaks Our collective focus remains on further reducing the aspiration level of 14%. Unit trips unplanned unavailability to consistently overcome the need for loadshedding. Our target is to achieve an average EAF of 66% in FY2026, moving towards 70% by FY2028. 101 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued KOEBERG PERFORMANCE The steam generator replacement is expected to Koeberg Nuclear Power Station continues to result in improved efficiency which will enable the In response to the unit’s successful synchronisation, Dan Marokane, Eskom’s Group Chief Executive, operate safely and reliably, delivering the lowest units to produce more power. However, the quantum commented, “Today’s developments once again reflect the progress of our Generation Recovery Plan, marginal primary energy cost among Eskom’s of the capacity increase cannot be certified until the which is central to ensuring the long-term sustainability of the broader economy. This achievement base-load generation assets. The station remains an defects monitoring period and plant optimisation moves us closer to consistently overcoming the need for loadshedding, which is now largely behind us indispensable contributor to South Africa’s energy efforts to enhance the units’ efficiency and output due to structural improvements in the generation fleet, as we continue to build a more reliable, resilient security and decarbonisation objectives. have been completed. Approval to increase the and sustainable power system.” maximum continuous rating (MCR) is required from Koeberg Unit 2 commenced the long-term operation internal and external governing bodies before the Bheki Nxumalo, Group Executive for Generation, added, “We applaud the Medupi team, support (LTO) programme on 11 December 2023 to replace staff and all execution partners for their dedication and professionalism, including the daunting task of capacity increase can be implemented. its three steam generators and prepare the unit for safely transporting the 400-ton generator stator approximately 1 000km by road from Richards Bay to long-term operation for another 20 years. The outage The NNR granted Eskom a long-term operating Medupi, a feat accomplished by Eskom Rotek Industries. Their achievement serves as a motivation for was successfully completed, and the unit synchronised licence on 15 July 2024 to continue operating Koeberg our teams as we advance our recovery efforts. We are confident that, like the other units, Unit 4 will to the grid on 30 December 2024, completing the Unit 1 for a further 20 years. The unit is now licensed deliver stable electricity to the national grid, enhancing South Africa’s energy security.” commissioning phase around mid-January 2025. to continue operating until July 2044, with scheduled maintenance and upgrades being performed in line The unit experienced a reactor trip on 2 March 2025 with the licence requirements. These activities will be due to operator error. A steam leak was discovered tracked as part of business-as-usual activities over the Full load losses due to major incidents Matla Unit 6 suffered an incident in December 2024 during start-up three days later and the unit was taken unit’s extended operating life. Medupi Unit 4 suffered significant damage in a due to the rupture of a high-pressure steam pipe above out of service for repairs. The unit was synchronised generator explosion in August 2021. The unit the transformer. Testing and analysis to determine the to the grid on 11 March 2025 and continues to The NNR has indicated that it will announce its was excluded from the nominal asset base from root cause is still underway. Due to the long lead time operate at full load. decision on Unit 2’s long-term operation prior to the October 2023 until 1 June 2025. for sourcing the required parts, the unit is expected expiry of the current licence on 9 November 2025, to be recovered by September 2026. The unit was Koeberg Unit 1 was shut down in accordance with once the current outage has been completed and all To enable the return to service of the unit until a new removed from the nominal base for reporting purposes operating technical specifications to restore the prerequisites have been met. generator stator can be fitted during a future planned and placed in extended inoperability from 1 July 2025. steam pressure relief system following a routine test outage, a used stator from the Netherlands was on 11 September 2024. The unit was safely returned Activities linked to the NNR’s directives for long-term installed as an interim measure. The unit was successfully Other losses to service on 20 September 2024. operation will be performed over the remaining life synchronised to the grid on 6 July 2025, marking a Poor coal quality accounted for 0.37% OCLF for of the units. These activities will be tracked to ensure major milestone in our strategic objective of achieving the year (2024: 0.75%), with most losses being The unit began ramping down on 1 January 2025 adherence to the directives. operational stability. Once the unit reaches full output, experienced at Matla. for a refuelling and long-term operating outage. The it will further strengthen our base-load generation unit was taken offline for the planned outage on As part of the licence requirements, we continue capacity, contributing to the stability of electricity supply 17 February 2025, ten days later than planned to assist working with the NNR to establish a ring-fenced and enhancing national energy security. in meeting higher than anticipated demand. The unit is nuclear decommissioning fund. This will ensure expected to return to service by October 2025. that sufficient financial resources will be available At Tutuka Unit 6, a fire during recommissioning in to fund Koeberg’s decommissioning costs in line November 2023 after a planned outage delayed LTO programme with international best practices and regulatory the unit’s return. The unit was placed in extended The Koeberg LTO programme, which includes the requirements. To date, we have set aside R2.4 billion inoperability in August 2024. The recovery plan is steam generator replacement project, is progressing in this regard (2024: R1 billion). being executed, with progress on the manufacturing in line with Eskom’s commitment to extend the and supply of spares at 70% by the end of the financial station’s operational capability by 20 years beyond its year; installation is in the initial stages. The unit is original design life. This is aligned with the Integrated expected to be recovered by October 2026. Resource Plan (IRP 2019) and national energy security objectives. 102 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued Nuclear safety REFOCUSING THE GENERATION RECOVERY 3. Executing strategic projects Eskom has deepened collaboration with international We maintain a robust nuclear safety culture underpinned PLAN: FROM STABILISATION TO SUSTAINABLE • Achieving commercial operation of Kusile Unit 6 utilities and OEMs to address persistent technical by a defence-in-depth approach with multiple layers of RELIABILITY • Recovering capacity under long-term outages challenges and enable skills transfer. Examples include: controls across the full spectrum of nuclear operations. Eskom’s Generation Recovery Plan, originally launched at Medupi Unit 4 and Koeberg Unit 1 • KEPCO and Siemens supporting boiler optimisation Safety and security remain the overriding priorities in in March 2023, has delivered measurable improvements and outage execution at Kendal and Majuba • Executing midlife refurbishment projects at all of Koeberg’s activities, ensuring the protection of in plant availability and system stability, while laying the • CNEEC providing spares and refurbishment Kendal, Matimba, Lethabo and Majuba personnel, the public and the environment. foundation for deeper structural reforms. The most support at Tutuka and Lethabo 4. Embedding a people, plant and process notable achievement is the avoidance of loadshedding on • NTPC assisting with FGD optimisation at Kusile Nuclear safety is governed by a comprehensive mindset 352 out of 365 days, with only five isolated instances of framework of objectives, policies and procedures, loadshedding between January and May 2025, with four • Implementing leadership and technical The revised Generation Operational Reliability and which are continuously validated through multi- of those in FY2025. EAF levels over 70% were achieved development programmes Sustainability Plan aspires to an EAF trajectory of 66% layered oversight. This includes internal governance on multiple occasions. • Strengthening contract management, spares by the end of FY2026, 68% by FY2027 and 70% from by Eskom executives and independent assurance from procurement and operational excellence FY2028 onwards. These targets are supported by national and international regulatory and peer review The plan was significantly refocused and expanded initiatives the closure of enabling actions identified in external bodies. These mechanisms provide us with a holistic after year end to transition from short-term recovery • Finalising long-term contracts with OEMs reviews coupled with the continued implementation and benchmarked view of nuclear safety performance. to long-term reliability and sustainability, culminating of the Energy Action Plan in collaboration with in the launch of the Generation Operational Reliability The previous focus on the top six underperforming NECOM. Eskom remains an active member of the World and Sustainability Plan. The expanded plan introduces stations – Duvha, Kendal, Kusile, Majuba, Matla Association of Nuclear Operators (WANO), while a strategic shift from reactive recovery of plant and Tutuka – has since been refined. Matla will be South Africa continues its membership in the availability to a proactive focus on long-term reliability removed from the priority list due to sustained International Atomic Energy Agency (IAEA). These and sustainability. This shift is anchored in four key improvement, and Matimba will be added. Arnot and affiliations enable Eskom to: focus areas: Kriel will continue to be closely monitored. • Align with international safety and operational 1. Improving plant reliability by reducing standards Station-specific recovery plans, incorporating unplanned unavailability • Participate in peer reviews and performance recommendations by external experts, are being • Reducing unit trips and unplanned losses, which implemented with support from the Generation benchmarking varied by up to 4 000MW during FY2025 Recovery Office and Centres of Excellence for • Access global best practices and technical expertise • Prioritising recovery at stations with high Operations, Maintenance and Outages. These plans • Support the continuous development and training par tial load losses, such as Kendal, Majuba are closely tracked to ensure accountability and of nuclear personnel and Tutuka measurable progress. The NNR’s decision in July 2024 to grant a 20-year • Addressing cross-cutting technical issues across licence extension for Unit 1 reflects its confidence multiple stations (such as mills, turbines, ash in Eskom’s safety case and operational readiness. plant and cooling towers) The decision on Unit 2 is expected following the 2. Enhancing outage planning and execution completion of its current outage and finalisation of remaining LTO prerequisites. If the life extension of • Strengthening the Outage Performance Unit 2 is approved, it would be allowed to continue Improvement Centre (OPIC) to provide operating until March 2026, as it has sufficient fuel to central oversight and assurance complete its current cycle before having to shut down • Improving outage readiness, due-date for routine refuelling. performance and post-outage reliability 103 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued ENERGY SUPPLIED BY IPPs ENERGY CAPACITY AND PURCHASES Emergency Generation Programme: Allows for the We continue to procure energy from IPPs under a Available IPP capacity and details of energy procured under various IPP programmes is set out below. procurement of energy from existing generators at range of government-led programmes, which are prices below Eskom’s marginal cost of generation. Six essential to diversifying the country’s energy mix Target Target Target Target Actual Actual Actual contracts were awarded, with two projects (160MW) towards cleaner energy sources, enhancing system Measure and unit 20281 2026 2025 met? 2025 2024 2023 operational during FY2025. However, these contracts resilience and supporting the transition to a more and their associated approvals expired by the end Total capacity, MW 9 859 7 559 9 164 7 495 7 495 7 110 competitive electricity market. of the year; governance processes are underway to Total energy purchases, GWh 93 700 28 307 23 921 19 365 20 183 17 957 extend the programme. We had 124 power purchase agreements (PPAs) in place at year end through NTCSA, representing Total spent on energy, R million 202 404 60 408 58 771 47 274 49 407 43 400 total contracted capacity of 10 216MW. Energy Lease accounting adjustment, R million2 (4 893) (2 592) (4 085) n/a (1 631) (1 632) (1 635) was supplied by 95 renewable energy projects Total expenditure, R million 197 511 57 816 54 686 45 643 47 775 41 765 In terms of pricing structure, the Standard with combined capacity of 6 180MW under the Weighted average cost, c/kWh3 211 213 246 244 245 242 Offer sets a fixed price at which suppliers Renewable Energy IPP (RE-IPP) Programme. NTCSA can choose to sell to NTCSA, while the also procures capacity from two IPP-owned OCGT 1. The 2028 target is the cumulative target over the next three years. Emergency Generation Programme allows with capacity of 1 005MW, together with the Risk 2. For accounting purposes, the fixed capacity charges for the Avon and Dedisa IPP OCGTs are treated as arrangements that contain a lease in terms of IFRS 16. Refer to note 2.8 in the financial statements for the related accounting policy. suppliers to bid their price and volume, with Mitigation IPP Procurement Programme (RMIPPPP) of 3. The weighted average cost is calculated on the total amount spent on energy, before deducting the lease adjustment. NTCSA selecting offers based on system 150MW and the Emergency Generation short-term needs and cost-effectiveness. energy procurement programme which contribute combined capacity of 160MW at year end. IR Refer to “Impacting the environment – Investing in renewable energy” for more information on energy supplied by renewable IPPs IR For a breakdown of IPP operational capacity by Battery Energy Storage IPP Programme source, refer to “Plant information” on page 145 (BESIPPP) PROGRESS ON IPP PROGRAMMES Risk Mitigation IPP Procurement Programme Round 1: Five preferred bidders (513MW) were RE-IPP Programme (RMIPPPP) announced. Four projects achieved commercial close Despite this progress, delays in bringing new IPP Bid window 5: Of the 25 projects (2 583MW) The RMIPPPP initially identified 11 preferred bidders by the end of November 2024 and the remaining capacity online – relative to the expectations set out announced in October 2021, 19 projects (1 759MW) (1 996MW). Of that, 1 568MW had to withdraw from project achieve commercial close in June 2025. The in the Integrated Resource Plan (IRP) 2019 – continue reached legal close. Of these, 11 projects (1 159MW) the programme due to unresolved environmental projects are in construction and are anticipated to to place pressure on the national grid, with no new are under construction and expected to reach and port authorisation issues. Three solar PV projects achieve commercial operation from July 2026. renewable IPP capacity being commissioned during commercial operation in FY2026. Eight projects with battery storage (150MW) achieved commercial the year. These delays have necessitated increased (600MW) failed to reach commercial close and have operation by December 2023. The remaining 278MW Round 2: Launched in December 2023 for 615MW reliance on Eskom and IPP-owned OCGTs to make been withdrawn. is in construction and expected to achieve commercial across eight sites in the North West. Eight preferred up the shortfall and mitigate the risk of loadshedding. operation during FY2026. bidders were announced in December 2024. We continue to collaborate with partners across Bid window 6: Six preferred bidders (1 000MW) Governance approvals have been obtained from Government and the private sector to accelerate were announced in December 2022. Two projects Eskom’s short-term procurement programmes NTCSA, and final governance approval through delivery and improve procurement efficiency to allow (360MW) reached legal close in April 2024, with Eskom launched two short-term procurement Eskom’s Board to conclude PPAs with the preferred IPPs to play a vital role in securing South Africa’s commercial operation anticipated over the next mechanisms during FY2023 to address the prevailing bidders is underway. energy future. 12-18 months. The remaining four projects received capacity shortfall. extensions to March 2026 to reach commercial close. Round 3: Launched in March 2024 for 616MW across Standard Offer Programme: Enables Eskom to purchase five sites in the Free State. Bid submissions closed Bid window 7: Launched in December 2023 with energy from customers or generators with surplus in November 2024, with five preferred bidders a request for proposals for 5 000MW. Eight capacity at the avoided cost of Eskom generation. By announced in May 2025. The process to obtain preferred bidders (1 760MW) were announced in 31 March 2025, agreements for 620MW had been governance approvals to conclude PPAs with the December 2024. Governance approvals have been signed, with projects expected to come online during preferred bidders is underway. obtained from NTCSA, and final governance approval FY2026. through Eskom’s Board to conclude PPAs with the preferred bidders is underway. 104 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued Gas-to-Power Programme CROSS-BORDER POWER IMPORTS AND NETWORK PERFORMANCE Launched in December 2023 with a request for EXPORTS NTCSA’s transmission network plays a foundational role in ensuring the secure and efficient delivery of electricity proposals to procure 2 000MW of land-based We actively participate in the Southern African across South Africa, with high-voltage lines evacuating energy from our power stations. An extensive distribution gas-fired capacity. The bid submission deadline was Power Pool (SAPP), which facilitates coordinated network distributes electricity delivered by the transmission network and IPPs to customers. We also supply extended to October 2025. The expectation is that planning and operation of the interconnected power redistributors (municipalities and metros) that manage their own distribution networks. this will be at various sites. systems of its nine member countries. This regional collaboration supports reliable and cost-effective  etail of our transmission and distribution infrastructure is set out on page 147 IR D DEE has requested NTCSA to consider a consolidated electricity supply across Southern Africa. 6GW gas programme to kickstart a local gas industry. Studies are underway to investigate an appropriately sized gas generation plant that would support the Target Target Target Target Actual Actual Actual bankability of a gas import terminal. Measure and unit 2028 2026 2025 met? 2025 2024 2023 Number of system minutes lost <1, 3.53 3.53 3.53 4.37 3.29 4.71 International sales and purchase volumes minutes SC, 1 Number of major incidents ≥1 minute, Target Target Target Target Actual Actual Actual 2 2 2 4 1 1 number GWh 20281 2026 2025 met? 2025 2024 2023 System average interruption duration index International sales 31 805 10 591 10 471 14 532 10 362 11 437 36.8 37.5 38.0 34.9 34.9 35.5 (SAIDI), hoursSC International purchases 16 814 4 791 9 776 7 570 9 150 8 654 System average interruption frequency Net sales 14 991 5 800 695 6 962 1 212 2 783 14.3 14.5 17.5 11.7 11.7 11.8 index (SAIFI), events 1. The 2028 target is the cumulative target over the next three years. Restoration time, %2 91.5 91.5 91.5 93.5 93.1 92.2 Distribution energy losses, % SC 10.46 11.33 9.65 10.42 9.92 9.74 International sales rose by 40% year-on-year, driven STRENGTHENING REGIONAL ENERGY 1. One system minute is equivalent to interrupting the whole of South Africa at maximum demand for one minute. by emergency support needed by neighbouring COOPERATION 2. Restoration time considers the time it takes to restore supply during an unplanned outage by measuring the percentage of dispatched countries and opportunistic sales on a non-firm As part of initiatives under the National Energy Crisis work orders where power is restored within 7.5 hours. basis, with the regional drought reducing the power Committee (NECOM), NTCSA is actively pursuing a available from other sources. This success was short-term energy purchase programme from cross- TRANSMISSION NETWORK PERFORMANCE TRANSMISSION DEVELOPMENT PLAN (TDP) facilitated by our improved generation performance. border utilities and IPPs to alleviate domestic supply System reliability performance for system minutes NTCSA is committed to increasing grid capacity and constraints. The programme will use a standard lost <1 performed outside target at 4.37 minutes ensuring grid stability to support the grid connection Firm power supply agreements were concluded or offer mechanism which reflects the avoided cost of extended with Botswana, Namibia and Zambia. These (2024: 3.29), with four major incidents being recorded of much-needed new renewable generation capacity. generation. during the year (2024: one), due to several equipment The Transmission Development Plan 2024 (TDP) agreements are expected to become increasingly common as the generation mix evolves. Non- failures at substations, human-related incidents as well was published at the end of October 2024, setting The Cross-Border Standard Offer Programme firm exports are only possible when supply is not as a veld fire that tripped several transmission lines. out the capital investment strategy to facilitate the was launched in October 2023, following receipt constrained and when loadshedding is not required. Nonetheless, switchgear performance improved due grid connection of additional generation capacity. The of the necessary government approvals. Although to the reduced frequency of switching operations TDP represents the most ambitious infrastructure several applications have been received from IPPs in Cross-border purchase volumes declined by 17% due related to loadshedding. expansion initiative in Eskom’s history. neighbouring countries, none have met the criteria for to lower output from Hidroelèctrica de Cahora Bassa development towards a power purchase agreement. (HCB) as a result of the regional drought. Additionally, Challenges persist due to ageing infrastructure which The 2024 update highlights the urgency of more faults and outages were experienced on the requires refurbishment. To improve overall system constructing approximately 14 500km of new high- These regional procurement efforts form part of our high-voltage direct current (HVDC) scheme that performance over the medium term, NTCSA is voltage transmission lines by 2034, which is essential comprehensive strategy to diversify generation supply delivers the power to our transmission grid. implementing the following initiatives: to unlock grid capacity and enable the integration sources, enhance grid stability and reduce reliance on • Reinforcing and refurbishing critical infrastructure of 37GW of new generation capacity. This ambition expensive emergency generation alternatives. These through system strengthening (N-1) projects requires an average construction rate of 1 500km initiatives not only bolster security of supply, but also reinforce South Africa’s leadership in promoting • Ensuring disciplined maintenance execution regional energy integration and cooperation. • Minimising human error and enhancing operational efficiency 105 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued annually, a significant increase from around 300km part of the digitalisation and metering infrastructure Total energy losses remained elevated at 12.34% Community engagement: We continue to engage with per year over the past five years. The regions being refurbishment programme. Once fully operational, (2024: 11.98%), with distribution losses accounting for community leaders to promote awareness, encourage prioritised for expansion are the Western Cape these meters will facilitate load limiting, prevent meter 10.42% and transmission losses for 2.35% (2024: 9.92% legal connections and foster shared responsibility for (12GW), Eastern Cape (7GW), Northern Cape tampering and manage customer debt through remote and 2.23% respectively). Total distribution energy infrastructure protection and safe electricity use. (6GW) and Mpumalanga (5GW). disconnections. losses amounted to 20.5TWh, of which almost 73% – or 14.9TWh – were attributed to non-technical losses IR For more information on addressing electricity theft Under the TDP, the focus remains on accelerating The outage management system pilot concluded (2024: 13.9TWh out of 19.1TWh). The estimated project development and execution. To accelerate during the year will be rolled out to all operating through ghost vending, refer to “Fighting crime, fraud cost of these non-technical losses, based on the and corruption – Ongoing investigation into the delivery, NTCSA is implementing innovative project units in FY2026. This initiative is expected to improve variable cost of coal-fired production, was estimated breach of Eskom’s online vending system” delivery models, including public-private partnerships efficiency in handling both planned and unplanned at R7.2 billion for the year (2024: R6.4 billion). The and the Independent Transmission Projects (ITP) (forced) interruptions. associated revenue loss is much greater. programme. These initiatives are designed to attract To support long-term network sustainability and AFS Note 45.2 in the financial statements deals with the private investment, share risk and expedite execution REDUCING TECHNICAL LOSSES enable future revenue growth, Distribution plans to associated contingent liability while maintaining system integrity. Capital affordability To mitigate technical losses, we are implementing is influenced by NERSA’s decision on the MYPD 6 strengthen the network by construction of around targeted interventions on medium-voltage networks, application, in light of the restriction on borrowings 1 800km of lines over the next five years. This including: Theft of overhead aluminium conductors, copper under Government’s debt relief programme. investment is crucial to: cables and pylon components continues to disrupt • Correction of voltage phase imbalances on feeders • Accommodate growing distributed energy operations. We have deployed advanced intrusion • Network reconfiguration to optimise load DISTRIBUTION NETWORK PERFORMANCE resources and embedded generation detection systems at substations, replaced stolen distribution Distribution network performance, measured by the • Improve service reliability copper with lower-value alternatives and intensified frequency and duration of customer interruptions and • Replacement of ageing infrastructure contributing • Reduce technical losses intelligence-led disruption operations. Despite the time taken to restore supply, remained consistent to elevated losses • Enable customer-centric innovations such as smart these interventions, conductor and cable theft with the prior year and significantly better than target. alone resulted in losses of R77 million from 1 585 metering and microgrids These measures are aligned with our broader grid However, electricity theft through illegal connections, incidents during the year (2024: R120 million from modernisation strategy and are essential to improving meter tampering and illegal vending continue to 2 380 incidents). Eskom continues to collaborate with ENERGY LOSSES AND EQUIPMENT THEFT operational efficiency, reducing losses and enhancing present significant financial and operational challenges. Eskom continues to face significant energy losses other state-owned companies, industry stakeholders, financial sustainability. Overloaded networks and transformers, particularly in across our networks, comprising both technical and the South African Police Service and the National high-density and informal areas, combined with theft non-technical components. These losses have material CURBING NON-TECHNICAL LOSSES Prosecuting Authority to strengthen enforcement and and vandalism of equipment, exert pressure on the financial and operational implications, particularly We have intensified efforts to curb non-technical prosecution. These efforts contributed to the decline network, leading to increased system interruptions. in the context of constrained supply and rising losses through a multi-pronged strategy: in incidents and led to 73 arrests during the year These challenges impact performance and divert infrastructure costs. (2024: 126 arrests). Reducing zero buyers: The KRN rollover project, resources from attending to planned maintenance, completed in November 2024, uncovered network faults and other critical incidents. Technical losses are an inherent feature of DELIVERING CAPACITY EXPANSION approximately 2.2 million customers who were either transmitting and distributing electricity, resulting Since inception of our capacity expansion programme buying tokens from ghost vendors or had tampered IR Refer to “Energy losses and equipment theft” from energy dissipated as heat when electricity in 2005 to 31 March 2025, we have increased installed with their meters; these are referred to as zero below for more information on our efforts to flows through conductors, transformers and other generation capacity by 16 328MW, extended high- buyers. Substantial progress was made during the reduce these losses network equipment. These losses are influenced voltage transmission lines by 8 915km and enhanced year, with zero buyers reducing by almost 900 000, by network design, conductor resistance, asset transmission substation capacity by 42 148MVA. The driven by the Zero Buyers Reduction programme. condition and load profiles. programme is on track for completion by FY2028. To safeguard network equipment and ensure public Smart meter rollout: The conversion of conventional safety, we have to utilise load reduction to protect Non-technical losses, however, remain the dominant We made notable progress in advancing the expansion meters to smart prepaid meters is being prioritised transformers overloaded due to illegal connections. concern. These include electricity theft, illegal of generation and transmission capacity during FY2025, in high-risk areas, as smart meters with advanced In doing so, we aim to mitigate the human, financial connections, meter tampering and bypassing, ghost despite earlier setbacks and ongoing constraints. metering infrastructure will contribute to preventing and operational cost of repeated equipment failures. vending (the purchase of fraudulent prepaid tokens) illegal vending. Around 800 000 smart meters were and billing inaccuracies. These activities not only erode As part of the Key Revision Number (KRN) rollover installed during the year, with another 7.2 million revenue but also compromise network integrity and project, 7.2 million prepaid meters were successfully meters to be installed over the next three years public safety. recoded from KRN 1 to KRN 2, with around under our compact with the shareholder. 5.6 million meters actively transacting. Additionally, around 800 000 smart meters have been installed as 106 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued Group funded capital expenditure (excluding capitalised borrowing costs) Target Target Target Target Actual Actual Actual Measure and unit 20281 2026 2025 met? 2025 2024 2023 Target Target Target Actual Actual Actual Generation capacity installed and Area, R million 20281 2026 2025 2025 2024 2023 commissioned (commercial operation), 800 800 800 799 – 799 Generation plant 74 424 27 953 26 525 26 683 26 531 24 517 MWSC, 2 Transmission network 60 555 9 800 6 732 6 473 4 269 3 543 Transmission lines installed, kmSC 2 635.0 423.0 286.0 292.6 74.4 326.1 Distribution network 36 642 8 980 3 507 4 112 2 879 2 603 Transmission transformer capacity 17 750 3 750 2 380 2 620 23 – installed and commissioned, MVA SC Subtotal: infrastructure investment 171 621 46 733 36 764 37 268 33 679 30 663 Future coal and nuclear fuel 11 643 3 594 3 851 3 011 2 769 2 861 1. The 2028 target is the cumulative capacity or lines to be commissioned and/or installed over the next three years. 2. The 2025 generation capacity target is a repeat of the 2024 target, i.e. the delivery of Kusile Unit 5, which was not achieved in FY2024. Other support areas 3 185 1 703 1 604 855 573 425 The cumulative target to 2028 refers to the delivery of Kusile Unit 6 in FY2026. Total group funded capital expenditure2 186 449 52 030 42 219 41 134 37 021 33 949 1. The 2028 target is the cumulative capital expenditure targeted over the next three years. An amount of R52 billion is targeted in In September 2022, the gas air heater on Kusile Unit 5 To advance the TDP, aimed at extending transmission 2026, with R65.4 billion in 2027 and R69 billion in 2028. caught fire during the third boiler steam blows, lines and transformer capacity to support the grid 2. Capital expenditure includes additions to property, plant and equipment, intangible assets and future fuel, but excludes strategic which was the final milestone activity prior to first connection of 37GW in additional generation spares, construction stock and capitalised borrowing costs. Figures noted above are based on internal reporting and do not necessarily align to the movement on property, plant and equipment as disclosed in note 8 in the annual financial statements. synchronisation of the unit. This resulted in the capacity over the coming years, emphasis remains suspension of all commissioning activities, causing on accelerating project development and execution. significant delays. Comprehensive repairs were Notable project risks include contractor performance, Capital expenditure for the year was R1.1 billion lower Unit 3 was completed and the unit returned to service required before commissioning activities – including community unrest, servitude access and delays in than budget, primarily due to delays on the battery on 7 February 2025. The reinstatement of Unit 2 was plant optimisation and capability tests – could resume. placing major contracts. The TDP Execution Oversight energy storage project and future fuel projects at completed on schedule and the unit was reconnected The repairs were completed by the end of August Committee was set up to closely monitor project several collieries, as well as commercial delays affecting to the permanent stack on 31 March 2025. Unit 1 was 2023 and the unit was successfully synchronised progress and delivery. transmission network strengthening and refurbishment shut down for a planned outage on 31 March 2025, to the grid on 31 December 2023. The unit went projects. This was partially offset by increased spend on ensuring compliance with DFFE’s exemption for into commercial operation on 30 June 2024, adding Potential manufacturing delays could impact future transformer capacity delivery. To mitigate this risk, Distribution’s rollout of smart meters. operating the temporary stacks. The unit returned 799MW of installed capacity to the grid. Despite the from outage connected to the permanent stack on final rated capacity of the unit being 1MW lower than 23 international factories have been accredited to MEDUPI AND KUSILE PROJECT supply high-voltage transformers and a panel of 4 June 2025. Dismantling of the original stack has been planned, it is considered to have met the shareholder PERFORMANCE completed, with all construction work expected to be compact expectation. 14 owner’s engineers appointed to supplement On Kusile Unit 6, all key commissioning milestones completed by the third quarter of FY2026. NTCSA’s internal project development, engineering have been successfully achieved, and the unit was NTCSA’s focused efforts and ongoing risk and project management capabilities. At Medupi, five units were in full commercial synchronised to the grid on 23 March 2025, followed management strategies enabled the target for the operation during the year under review, with Medupi by full load on 23 April 2025. The unit has since been installation of transmission lines installed for the year Unit 4 remaining offline following the generator contributing base-load power to the grid. The unit being exceeded, with significant progress achieved explosion in August 2021 until it was returned to has undergone extensive testing and optimisation across four key projects. The target for transformer service with a used generator stator on 6 July 2025. – which includes grid code compliance, a 72-hour capacity was also exceeded, with 2 040MVA being continuous run and 30-day reliability run – ahead commissioned at six substations together with an of commercial operation, which was achieved on IR For more information on the return to service of additional 580MVA from three IPP self-build projects. 29 September 2025. The overall Kusile project is Medupi Unit 4 subsequent to the year end, refer to on track for completion early in FY2028. “Generation performance – Full load losses due to major incidents” earlier in this section Kusile Units 1 to 3 – which were taken offline in October 2022 following a flue gas duct failure in the west chimney stack – have been successfully The focus at Medupi is on completing the remaining returned to service using temporary stacks about balance-of-plant scope, resolving outstanding claims a year later. The stabilisation of the main stack was and moving towards full project close-out. The FGD completed in July 2024. The reinstatement of the flue retrofit project is a longer-term priority to ensure gas desulphurisation (FGD) plant and main stack for environmental compliance. 107 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued CORRECTING MAJOR DESIGN AND OTHER PROJECTS is regularly updated on the status and progress – it BATTERY ENERGY STORAGE SYSTEM CONSTRUCTION DEFECTS AT MEDUPI AND MEDUPI FGD RETROFIT will be provided with a more accurate programme Eskom’s battery energy storage system (BESS) KUSILE The Medupi FGD retrofit project is a critical after contract award to the chosen Engineering, programme is a cornerstone of our strategy to The technical remediation of all major plant defects component of our environmental compliance strategy Procurement and Construction supplier and delivery modernise the grid, enhance system flexibility and at both the Medupi and Kusile power stations were and a key condition of the World Bank’s funding partner. The final schedule will depend on the chosen support the integration of renewable energy. The successfully completed by December 2024. These agreement for Medupi Power Station. The retrofit will contractor’s execution schedule, the technology programme is co-financed by the World Bank, corrective measures have resulted in a steady enable Eskom to reduce sulphur dioxide emissions in solution selected and the power station outage plan. the New Development Bank and the African improvement in unit availability and reliability, line with South Africa’s atmospheric emission licence Development Bank, and is aligned with South Africa’s supporting our broader objective of stabilising (AEL) requirements and international best practices. Implementation of the last three FGD units is broader energy transition objectives. generation performance and ensuring that new-build dependent on an additional water supply line from assets meet contractual performance obligations. While Kusile Power Station was commissioned with Thabazimbi, implemented by the Trans-Caledon Tunnel The BESS initiative addresses local system challenges – wet FGD technology installed, Medupi’s original Authority, an agency of the Department of Water and such as peak demand, grid congestion and renewable The defect correction programme was executed business case included a commitment to retrofit FGD Sanitation. The construction tender was awarded early intermittency– while demonstrating the viability of in close collaboration with the original contractors systems within six years of each unit’s commissioning, in FY2026, with completion of this critical supply line large-scale storage deployment in support of the and overseen by Eskom Engineering. The total cost aligned with scheduled general overhaul outages, being anticipated by January 2030. Water for the first national renewable energy strategy. Phase 1 of the BESS of addressing boiler plant defects at both stations supporting our broader air quality strategy and long- three units of Medupi’s FGD retrofits will be available programme will deliver approximately 800MWh of amounted to R688 million. These costs were term sustainability objectives. from the existing Mokolo Dam. storage capacity across four implementation packages. contained within the Board-approved execution release approvals (ERAs) for the projects. The project remains in the development phase. The The original cost estimate of R38.4 billion has been Under phase 1, the Hex site is complete and fully Board’s Investment and Finance Committee has revised to R41.7 billion, reflecting inflationary pressures operational. The Pongola and Elandskop sites achieved Establishing accountability for the defects remains approved Eskom’s revised strategy, which confirmed and market dynamics. This estimate will be further commercial operation in October 2024, contributing a priority. The contractual process to determine wet FGD as the preferred technology. refined following the conclusion of the tender process. to grid stability and peak demand management. liability is ongoing, with responsible parties being held Construction activities, although delayed, continue at to account within the provisions of their contracts. The request for proposal for the project and the Meeting the atmospheric emission licence (AEL) the Skaapvlei, Graafwater and Paleisheuwel sites – all We continue to enforce our rights to ensure that the closing date has been extended to 2 February 2026 conditions and adhering to lender timelines pose of the battery equipment has been delivered, and financial burden of these defects is not transferred to following requests from bidders. The design, fabrication significant challenges. We are actively engaging with commissioning is anticipated during FY2026. We expect the utility or the public. and construction will follow contract award. As the the shareholder and other relevant stakeholders the contract for the Melkhout and Rietfontein sites to be lead funder on the Medupi project, the World Bank regarding the possibility of an extension. awarded by the third quarter of FY2026 following the While the major technical issues have been resolved, no-objection decision from the World Bank. further modifications may be required to address residual performance risks or to enhance long- Phase 2 of the project is on hold given Government’s term operational efficiency. These will be planned, debt relief conditions and the lack of funds from our budgeted and implemented as part of the ongoing own reserves. However, the 600MWh Komati PV and technical optimisation programmes at each site, BESS project has been decoupled from phase 2 and is depending on unit outage availability under the outage proceeding under existing approvals. plan and the extent of solutions required. The successful resolution of these long-standing defects marks a critical milestone in Eskom’s infrastructure recovery journey and reinforces our commitment to engineering excellence, contractual discipline and operational resilience. 108 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Strengthening our infrastructure continued RESEARCH AND DEVELOPMENT PROJECTS During the past year, RT&D advanced several high- • Dynamic volt-amp reactive (D-VAR) devices These initiatives are complemented by our broader Our Research, Testing and Development (RT&D) unit priority initiatives aligned with Eskom’s operational D-VAR technology is being piloted to manage innovation agenda, which includes deploying plays a pivotal role in supporting the organisation’s and strategic objectives. voltage fluctuations caused by variable solar and containerised microgrids for the electrification of strategic transformation and future sustainability, wind generation on medium-voltage networks. rural communities and to enable charging of electric by ensuring that Eskom remains at the forefront of • High-resistant fabric filter bags vehicles (EVs), as well as rolling out Africa’s largest This will improve power quality and voltage energy technology advancements. The research High-resistance filter bags were installed at regulation in renewable energy-rich areas. battery energy storage system (BESS) at the Hex site agenda is shaped by the needs of our core business, Medupi and Kusile to address corrosion and in the Western Cape. with the emphasis on applied research that delivers erosion in fabric filter plants. These improve gas • Kilbarchan passive mine water treatment hands-on, operational solutions directly aligned distribution and filtration efficiency, reducing A passive treatment system is being tested at a SR For more on these initiatives, refer to “Research and with our strategic objectives. At the same time, we operational downtime required for maintenance rehabilitated coal mine to manage contaminated development” in the sustainability report examine emerging technologies and innovations and enhancing environmental compliance through water discharge. If successful, this will lead to to ensure that Eskom remains competitive and improved air quality control. a cost-effective, low-maintenance solution sustainable. RT&D continues to collaborate with academic supporting long-term environmental protection. • Low fuel ignitors institutions, industry partners and international agencies Investment in projects is based on a 60:30:10 strategy Plasma and mini oil burner ignition systems are • Infrastructure protection using to accelerate the development and deployment of across the short, medium and long term. In the being piloted to reduce fuel oil consumption beneficiated ash technologies that support Eskom’s Just Energy Transition short term, RT&D’s strategy focuses on supporting during start-up and low-load operations, thereby (JET), operational improvement, environmental Ash-based concrete, which is fireproof and more operational recovery across the generation, lowering operating costs and improving efficiency compliance and digital transformation goals. durable than traditional cement, is being piloted transmission and distribution businesses. Over the at coal-fired stations. to protect telecom infrastructure from vandalism medium term, the unit is enabling the transition from and theft. This will enhance infrastructure coal-based generation to a diversified, lower-carbon • Grid-forming inverters resilience using sustainable materials. energy mix. In the long term, it is assisting to position Research was concluded on the role of Eskom as a leading clean energy utility, driving grid-forming inverters to enhanced grid innovation, sustainability and competitiveness in a stability in utility-scale renewable integration. SR F or more on our efforts to find innovative transformed electricity industry. Recommendations based on the Finnish applications for beneficiated ash, refer to “Environmental management – coal ash specification will be proposed to update the beneficiation” in the sustainability report national grid code. 109 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment As an electricity utility reliant on resource-intensive ageing power stations, the deployment of advanced We are also dedicated to embedding the environmental aspect of our ESG plan into our operations as shown below. processes, our operations continue to exert a technologies to improve environmental performance, significant impact on the environment, while our together with a strategic shift toward renewable operations are also affected by the environment. We energy investments. Climate change mitigation and adaptation depend primarily on non-renewable resources – coal, Develop and implement mitigation plans to address Biodiversity, land use and water, nuclear fuel and diesel – to generate electricity, A cornerstone of Eskom’s sustainability agenda is our climate change and adaptation impact on wildlife commitment to increasing the share of renewables which result in emissions, land and biodiversity impacts, as well as ash and other waste streams that in our energy portfolio, thereby reducing our carbon Drive repowering and repurposing initiatives to reduce environmental and social impact 1 Implement land and biodiversity plans to manage land use and must be managed responsibly. Our nuclear power footprint and aligning with national and global climate wildlife impact station, Koeberg, uses little fresh water, and nuclear objectives. These initiatives are embedded within our broader strategic planning and risk management is considered a low-carbon technology. We remain 5 2 E frameworks. We continue to focus on compliance Water use, reduction, security committed to reducing our environmental footprint of supply and pollution through targeted interventions across air quality, water with licences for atmospheric emissions, water use Implement water management plan use, waste management and biodiversity protection, and other activities as well as our ash beneficiation to ensure sustainable water use together with burning coal more efficiently to reduce initiatives, aligned to our value of Zero Harm. These actions and initiatives demonstrate our dedication Air pollution, health and the environmental impact. air quality management to responsible corporate citizenship and long-term Key milestones in FY2025 included the reinstatement of the permanent flue gas desulphurisation (FGD) environmental stewardship. Waste reduction and beneficiation Execute waste management plan (including 4 3 Execute the environmental management plan and clean coal Climate change remains a central concern. In ash beneficiation) to minimise waste and technologies to reduce emissions stack serving Kusile Units 1, 2 and 3 to reduce and manage air pollution alignment with the Climate Change Act, 2024 which promote beneficiation SO2 emissions. We also achieved a reduction in CO2 emissions compared to 2019 levels of around came into effect in March 2025, we implemented 9%, contributing to a declining share of national divisional and subsidiary climate adaptation plans greenhouse gas emissions, which now stands at and strengthened our risk management systems and reporting on greenhouse gas (GHG) emissions. SECURING OUR RESOURCE REQUIREMENTS around 41%. Our particulate emissions and relative Our GHG emissions for FY2025 were limited Eskom’s electricity generation relies on a diverse mix of primary energy sources: coal, fuel oil, diesel, nuclear fuel water consumption reduced further by taking partial to 205.1Mt CO2e, well below the baseline of and water, together with sun and wind for renewable plant. In FY2025, securing these resources remained vital load losses at less efficient units when required and 214Mt CO2e expressed in our second Pollution to ensuring system reliability, affordability and environmental compliance. Our primary energy sourcing approach the operation of dry-cooled stations such as Medupi, Prevention Plan. These efforts support our Just prioritised timely procurement, quality assurance and cost optimisation, while also aligning with our broader Kusile, Matimba and Kendal. Energy Transition and our long-term goal of achieving strategic objectives of operational recovery, decarbonisation, and long-term sustainability. We acknowledge our environmental compliance net-zero emissions by 2050. We are actively reducing challenges. In response, we are implementing our environmental footprint while supporting global BALANCING THE QUALITY AND COST OF OUR COAL SUPPLY long-term strategies to address these challenges. and national climate commitments. Technical performance These include the Just Energy Transition strategy which covers the repowering and repurposing of Target Target Target Target Actual Actual Actual Measure and unit 2028 2026 2025 met? 2025 2024 2023 Coal burnt, Mt1 90.73 99.10 102.17 106.18 99.48 102.38 Coal purchased, Mt n/a 107.18 106.24 107.29 107.45 98.42 Coal purchase R/ton, % increaseSC n/a 14.0 10.0 2.9 6.6 12.6 Coal stock days n/a 107 92 79 80 65 Normalised coal stock days, budgeted n/a 32 32 40 45 29 standard daily burn2 1. From 1 April 2022, pre-commissioning burn is no longer capitalised to the asset and instead recognised in primary energy cost. However, pre-commissioning burn is still excluded from the figures reported above. The current year figure excludes 416kt coal burnt during the commissioning at Kusile (2024: 573kt). 2. Normalised coal stock days exclude coal at Medupi. 110 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment continued SECURING STABILITY WHILE MANAGING Our coal supply strategy continues to prioritise long- All supply contracts are actively managed to align SUSTAINING GENERATION OPERATIONS TRANSITION RISK term, cost-effective contracts delivered by conveyor, with stations’ useful lives, avoiding surplus coal stock THROUGH WATER SECURITY Coal remains the dominant fuel source in our aligned to station-specific coal quality requirements. and financial penalties. This approach supports both Water remains a critical input for Eskom’s coal- generation portfolio, accounting for approximately 85% In FY2025, this strategy was reinforced to support operational continuity and our broader transition fired generation fleet, particularly for cooling and of our installed capacity and more than 90% of energy the Generation Recovery Plan, which enabled a objectives by ensuring coal supply remains stable demineralisation water processes. In FY2025, we sent out by Eskom in FY2025. With coal procurement sustained period of improved energy availability and while the energy mix evolves. continued to prioritise water security through long- representing around 85% of Eskom’s primary energy reduced reliance on emergency generation, enabling term supply agreements, infrastructure resilience and costs during the year, securing a reliable and cost- the achievement of 310 consecutive days without Our top 10 coal suppliers are set out below. proactive engagement with the Department of Water effective coal supply of acceptable quality is critical to loadshedding until 30 January 2025. and Sanitation (DWS). Our water strategy aligns with Supplier Contract type both operational stability and financial sustainability. the broader transition to a lower-carbon energy mix, Exxaro Coal Mix of cost-plus and while ensuring uninterrupted operations at existing fixed-price wet-cooled stations. The volumes and value of coal purchased over the past year were made up as follows: Seriti Coal Mix of cost-plus and Coal volumes, % Value of coal purchased, % fixed-price The Integrated Vaal River System (IVRS) remained stable at 101.6% storage at 30 March 2025 (2024: Universal Coal Fixed-price 90.7%). Although the system yield is expected 36 33 Salungano Fixed-price to remain in deficit until the Lesotho Highlands Water Project Phase 2 is commissioned in 2028, no 39 Glencore Fixed-price restrictions to Eskom’s operations are anticipated HCI Coal Fixed-price over the next four years. 42 Mbuyelo Fixed-price The development of the Mokolo Crocodile Water Into Africa Mining and Fixed-price Augmentation Project (MCWAP) Phase 2A is now Exploration expected to deliver water by January 2030. This is critical to supporting the flue gas desulphurisation Mwelase Mining Fixed-price 25 25 (FGD) retrofit at Medupi and ensuring long-term water Namane Resources Fixed-price supply to Matimba and Exxaro’s Grootegeluk mine. Cost-plus Fixed-price Short/medium-term contracts The Mokolo River System, which supplies Matimba and Managing coal quality to enhance reliability and Medupi, remained at full capacity at year end, at 105.5% reduce emissions (2024: 100.2%), but the risk of curtailment remains until To mitigate supply risk and stabilise stock levels, we To address these shortfalls, we have implemented robust Coal quality remained a key operational focus in MCWAP Phase 2A becomes operational. increased procurement from cost-plus contracts, recovery plans. The under-supply from existing suppliers, FY2025, particularly at high-impact stations such as maintaining a disciplined approach to cost. The exacerbated by extended periods of high rainfall, Matla, which accounts for more than 85% of the coal- IR Refer to “Strengthening our infrastructure – Other average cost per ton of coal rose by only 2.9% year- contributed significantly. Furthermore, coal supply to related load losses. Despite this, coal-related losses projects” on page 108 for more information on-year (2024: 6.6%) due to improved production at Majuba faced disruptions due to rail infrastructure issues were contained at 0.37% OCLF (2024: 0.75%). cost-plus mines and favourable pricing negotiated with and locomotive failures. We are actively collaborating short- and medium-term suppliers. with Transnet Freight Rail to resolve these challenges and Significant progress was made in improving the quality The Lesotho Highlands Water Project Phase 1 ensure a stable coal supply. of coal delivered by both conveyor and road. At underwent essential planned maintenance work Although we continued to prioritise the recovery of Matla, a blended supply strategy – mixing coal from from October 2024 until April 2025, with some coal stock days during the year to enhance operational During the year, we concluded several coal supply the tied colliery with higher-quality sources – was delays experienced. Water supplied from the Vaal resilience and reduce the risk of supply disruptions, agreements (CSAs) to address coal requirements implemented as an interim measure, while longer- Dam to Eskom’s power stations, Rand Water and five power stations had coal stock levels below their across various power stations. Key agreements include: term beneficiation options are being explored in municipalities was not affected as the Vaal Dam’s level individual minimum stockholding requirement by year • Kusile: Approximately 54.4Mt of coal will be collaboration with the mine. Across the system, remained above 100% following a high rainfall period. end (2024: none). Despite these shortfalls, all power supplied by conveyor from a nearby mine verification sampling and quality assurance initiatives stations maintained stock levels above the Grid code • Duvha and Tutuka requests for proposal: CSAs have yielded measurable improvements in coal quality requirement and normalised coal stock days remained have been concluded for both stations from short- and medium-term suppliers. above target, thereby ensuring continued compliance • Matla: Renewal negotiations are in progress, with to support operational stability. the existing CSA extended until an agreement can be concluded 111 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment continued Our water security strategy has been tested by underway to initiate a new procurement cycle for fuel Target Target Target Target Actual Actual Actual infrastructure constraints, climate variability and fabrication services, with contracts expected to be Measure and unit 2028 2026 2025 met? 2025 2024 2023 the increasing complexity of inter-basin transfers. awarded for deliveries commencing in 2026. Although dam levels remained high across key Particulate emissions, kt1 n/a n/a n/a n/a 122.94 145.30 129.32 systems, the risk of localised curtailments and water These arrangements are critical to sustaining Relative particulate emissions, 0.33 0.35 0.30 0.64 0.79 0.70 quality deterioration persisted, requiring proactive Koeberg’s contribution to South Africa’s base-load kg/MWh sent out SC, 2 planning and coordination with DWS and other energy mix, particularly as the station undergoes Carbon dioxide (CO2), Mt1, 3 n/a n/a n/a n/a 204.6 190.4 187.5 stakeholders. life-extension and modernisation initiatives aligned Nitrous oxide (N2O), t1, 3 n/a n/a n/a n/a 1 470 1 382 1 438 with our broader decarbonisation and energy security Methane (CH4), t1, 3 n/a n/a n/a n/a 1 567 1 523 1 483 Water quality deterioration in the upper Vaal River objectives. Carbon dioxide equivalent (CO2e), Mt1, 3 n/a n/a n/a n/a 205.1 190.9 187.9 System remains a concern, with several stations Sulphur dioxide (SO2), kt1, 3 n/a n/a n/a n/a 1 591 1 431 1 449 requiring upgrades to water and waste treatment AFS For further information on nuclear fuel balances, Nitrogen oxide (NO x as NO2), kt1, 4 n/a n/a n/a n/a 772 735 743 infrastructure to enable operation with poor water refer to note 10 on future fuel supplies and note 13 quality. We continue to engage with DWS through on inventories in the annual financial statements Specific water consumption, 1.35 1.37 1.37 1.40 1.43 1.39 quarterly forums to address these risks and ensure ℓ /kWh sent out SC, 2 alignment with national water reallocation strategies. Net raw water consumption, Mℓ1 n/a n/a n/a n/a 268 638 260 680 256 430 REDUCING OUR ENVIRONMENTAL Environmental legal contraventions, In response to growing water stress in Gauteng, we FOOTPRINT n/a n/a n/a n/a 65 68 105 number1 have implemented water conservation and demand We employ several KPIs to measure the effectiveness Environmental legal contraventions management measures across our facilities and of our interventions. These include relative reported as a result of significant failure – – – – 7 10 activated business continuity plans to mitigate the particulate emissions, specific water consumption of business systems, number 5 impact of municipal supply interruptions. and the number of reported environmental legal contravention incidents. 1. No target is set for emission volumes, net raw water consumption or environmental legal contraventions. Therefore, the target for Looking ahead, our total water demand is expected these measures is shown as not applicable. to decline over the next decade as older wet-cooled The environmental interaction of our operations is 2. Relative particulate emissions values and specific water consumption include all units at Medupi as well as Kusile Units 1 to 4. Units are only included one year after achieving commercial operation, therefore, Kusile Unit 5 is still excluded. At stations with unusually high coal stations are decommissioned and replaced by strategically managed through the implementation emission levels, such as Kendal, the monitors often exceed their maximum limits, resulting in an under-reporting of total emissions and dry-cooled stations together with renewable and of governance oversight plans. These include relative performance. nuclear capacity. However, the retrofitting of flue gas comprehensive water management strategies, 3. Emission figures are calculated based on coal characteristics and power station design parameters using coal analysis and coal burnt desulphurisation (FGD) systems would increase water emission reduction initiatives and air quality tonnages. Figures include coal-fired and gas turbine power stations, as well as oil consumed during power station start-ups. use at selected stations, requiring careful balancing of 4. N2O and NO x are calculated using average station-specific emission factors (which are measured intermittently) and tonnages of improvement plans at our generation facilities. coal burnt. environmental compliance and resource efficiency. Additionally, we are engaged in bird mortality 5. These relate to specific cases of environmental legal contravention incidents that are of high significance in terms of the impact on the mitigation projects on our operations. environment and/or on Eskom in that they have a material business impact and illustrate a significant failure of business systems. IR For a discussion of our water usage, refer to “Managing water consumption” on page 114 in this  efer to page 149 for information on the environmental implications of using or saving electricity IR R section ENSURING KOEBERG’S CONTINUITY THROUGH NUCLEAR FUEL SECURITY Eskom maintained security of nuclear fuel supply for the Koeberg Nuclear Power Station throughout FY2025. Long-term contracts for enriched uranium product remain in place through 2028, providing continuity and flexibility in the nuclear fuel supply chain. Existing contracts with Westinghouse and Framatome ensured uninterrupted delivery of fabricated nuclear fuel, with sufficient volumes secured to meet operational requirements through the end of the 2025 calendar year. Processes are 112 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment continued LIMITING PARTICULATE AND GASEOUS IR Incidents reported to DFFE under section 30 of EMISSIONS Following the failure of the west chimney stack at Kusile in October 2022, the Department of Forestry, NEMAQA are disclosure under “Reducing The generation of electricity through burning coal environmental legal contraventions” later in Fisheries and the Environment (DFFE) authorised Eskom in June 2023 to construct temporary stacks releases greenhouse gases, particularly carbon dioxide this section to operate the units until the permanent stack could be completed. DFFE provided the necessary (CO2) which contributes to climate change. Coal-fired approvals to operate the temporary stacks at relaxed sulphur dioxide emissions levels while repairs were power stations also emit other major contributors to undertaken to the west stack. air pollution: these are particulate matter (PM) and By year end, 19 units were operating in non- gaseous emissions such as nitrogen oxides (NO2) and compliance with average monthly emission limits The permanent repair of the west chimney stack at Kusile has been completed. Eskom maintained sulphur dioxide (SO2). (2024: 16), placing 12 735MW at risk of censure or the necessary environmental approvals to construct and operate the temporary stack solution until closure by the authorities (2024: 9 045MW). The 31 March 2025. The reinstatement of the FGD plant has been completed and all three units have been Air pollution poses serious global health risks, main contributors were Kendal, Matla, Lethabo, connected to the permanent stack. None of units operated without FGD after 31 March 2025. especially from long-term exposure to fine particulate Matimba and Kriel. Some notable reasons for matter, which contributes to cardiovascular and operating in non-compliance were malfunctions at For further information on the return of the permanent stack, refer to “Strengthening our infrastructure respiratory diseases. These pollutants harm both the dust handling plant, underperformance of the – Medupi and Kusile project performance” on page 107. humans and the environment. Monitoring ambient air electrostatic precipitators and flue gas conditioning quality is vital for assessing pollution, guiding policies (SO3) plant, as well as excessive emission exceedances No non-compliance with the SO2 stack limits or SO2 ambient standards occurred while operating the and protecting communities and our employees who during unit start-ups. temporary stacks. live and work near and in coal-fired power stations. Particulate matter limits The National Environmental Management: Air Quality It is estimated that coal-fired units have operated Act, 2004 (NEMAQA) requires the installation of in non-compliance with their allowable daily RELATIVE PARTICULATE EMISSIONS To address the poor performance, Generation technology to reduce emissions. Since the early 1980s, limits for particulate matter emissions on 1 508 Relative particulate emission performance of 0.64kg/ continues to foster a culture of environmental we have implemented pollution reduction technology operating days (combined for all units) during the MWh sent out has shown significant improvement compliance, acknowledging its critical role in to reduce particulate matter and NOx emissions. year (2024: 2 235 days). The biggest contributors since the previous year (2024: 0.79kg/MWh sent enabling sustainable asset management. Efforts are Kusile Power Station is our first power station to have were continuous exceedances at Matimba, Kendal out), despite still falling short of the target. Kriel, ongoing to implement emission recovery actions FGD installed to reduce SO2 emissions, while Medupi and Kriel, with deteriorating plant performance Matla, Kendal, Lethabo and Matimba continue to across underperforming units. When necessary, Power Station should be retrofitting FGD. and system constraints remaining the greatest underperform significantly. Factors contributing to underperforming units take partial load losses or contributing factors, with units forced to operate in poor performance include challenges in dust handling they are taken offline for repairs to improve overall IR More information on particulate and gaseous non-compliance to meet demand and mitigate the risk and ash plant operations; poorly performing and operational efficiency. emissions is available in the technical statistical table of loadshedding. damaged electrostatic precipitators (ESPs) which are on page 140 essential for limiting particulate emissions; and sulphur Kendal emission challenges NOx emission limits conditioning (SO3) plant failures. Additionally, when In 2019, Eskom was charged with non-compliance There were three reportable exceedances of electricity supply is constrained, some units have to with the atmospheric emission licence (AEL) at Kendal COMPLIANCE WITH ATMOSPHERIC EMISSION NOx limits by coal-fired power stations during the continue operating with high emissions at times in Power Station. Proceedings continued since then, with LICENCES year (2024: 31). Most of the exceedances initially order to mitigate the risk of loadshedding. the final court hearing taking place in November 2024. We are permitted to emit atmospheric pollutants recorded are either due to monitoring issues, which A judgment in Eskom’s favour was received in within certain limits, based on atmospheric emission were proven during investigation to have been Six of the 14 coal-fired stations met their relative January 2025. In the judgment, the magistrate licences (AELs) issued by the authorities to individual misreported as exceedances or legally allowable in emission targets for the year, namely Kusile, Hendrina, discharged two charges relating to the exceedance power stations. terms of the grace periods allowed by AELs relating Medupi, Tutuka, Camden and Duvha. Additionally, of particulate matter emission limits under normal to upset conditions, unit shutdown or start-up, and Grootvlei, Arnot and Majuba came close to meeting operating conditions based on a lack of evidence Coal-fired stations continue to operate in general maintenance conditions. their targets for the year. The remaining five stations presented by the State. On the third charge, concerning compliance with emission limits in their AELs, although significantly underperformed against their targets. the exceedance of fugitive emission levels from the non-compliance with these limits occurs periodically SO2 emission limits ashing facility, the magistrate also ruled to discharge and are reported to the authorities as required. Our There were no reportable exceedances of daily the matter. AELs require us to report emergency incidents to the SO2 limits by coal-fired power stations during the authorities, referred to as section 30 incidents under year (2024: seven). Most of the exceedances initially the National Environmental Management: Air Quality recorded are due to monitoring issues, which were Act, 1998 (NEMAQA). proven during investigation to have been misreported as exceedances. 113 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment continued Kendal has significantly improved its emissions and in May 2024, after consultation with the National The decommissioning and/or repowering and Projected annual water use over the medium term regularly achieved compliance on the south stack by Environmental Consultative and Advisory Forum repurposing plans for stations which received a year end. This was due to the focused implementation she had established. The decision was generally suspension decision in May 2024 were prepared -43% of the agreed-upon emission recovery plan as a favourable to the continued operation of our coal- and submitted to the DFFE Minister in May 2025 as Water projection (Mn3/p.a.) condition of the AEL compliance directive received in fired power stations. required. DFFE has appointed an expert panel to 2019, with repairs on all units having been completed. review our submissions. In relation to the power stations that are to be Air quality offset programmes decommissioned by 2030 – Hendrina, Grootvlei, MANAGING WATER CONSUMPTION We are undertaking an air quality offset programme Arnot, Camden and Kriel – our request for Generation utilises high volumes of water to produce to align to DFFE’s call to reduce emissions caused suspension of the MES limits was granted; this electricity. Given our status as a strategic water 271 by power generation. The programme aims to affects around 10 000MW of installed capacity. The user assured of water supply at the highest level of 254 247 232 208 reduce particulate matter emissions in communities decision allows these stations to continue operating assurance over the life of our power stations, we have 154 adjacent to and affected by some of our coal-fired at emission levels attainable using already installed a responsibility to reduce our water use in a water power stations by improving ambient air quality and emission reduction technologies. We were directed scarce country such as South Africa. Over the next indoor thermal comfort, through insulating homes to submit decommissioning plans within 12 months of five years, Generation plans to decrease its water use 10.7 with ceilings, switching households from coal to the decision. The decommissioning and/or repowering by 43%. 2025 2026 2027 2028 2029 2030 electricity and liquid petroleum gas, and reducing and repurposing plans were prepared and submitted the burning of waste. Our goal is to reduce harmful to the DFFE Minister in May 2025 as legally required. indoor emissions and create a cleaner, healthier environment for communities living near and For power stations operating beyond 2030, namely affected by our power stations. Lethabo, Duvha, Matla, Tutuka, Kendal, Majuba, Medupi and Matimba (affecting around 30 000MW The project in KwaZamokuhle near Hendrina of installed capacity), we were directed to apply for concluded in October 2024, with 3 505 houses an exemption from the provisions of NEMAQA in completed as planned. At Ezamokuhle near Majuba, respect of each of these facilities within 60 days of the the project concluded in September 2024, with issuance of the decision. We requested an extension, 2 086 out of a planned 2 100 houses completed. which DFFE granted. After public consultation, In the Sharpeville area, all six waste clean-ups have the exemption application was submitted in been completed. Planning and contracting for further December 2024 as required under the extension. phases of the programme is underway. On 31 March 2025, the DFFE Minister issued a COMPLIANCE WITH MINIMUM EMISSION generally favourable MES exemption decision for STANDARDS Lethabo, Duvha, Matla, Tutuka, Kendal, Majuba, We are required to reduce gaseous emissions Medupi and Matimba. The decision grants exemption of sulphur dioxide and nitrogen oxides as well as until 31 March 2030 for Lethabo, Tutuka, Kendal, particulate matter under limits set out in the Minimum Majuba, Medupi and Matimba, thereby allowing Emission Standards (MES), first published in 2013 and these stations to continue to operate. Duvha and amended in 2018. The objective of the regulations is Matla received an MES exemption until their planned to protect people and the environment by requiring decommissioning in 2034. No requirement for reasonable measures for the prevention of pollution additional NOx or SO x projects beyond Eskom’s and ecological degradation, while ensuring ecologically existing commitments have been stipulated in the sustainable development and promoting justifiable MES exemption decision. However, the decision does economic and social development. place multiple additional requirements on Eskom, ranging from additional ambient air quality monitoring After several rounds of exemption applications and to additional health support to communities. Work appeals, the then Minister of Forestry, Fisheries and has been initiated to meet these requirements. the Environment (DFFE) announced a decision on our appeals on our MES postponement applications 114 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment continued Kendal and Tutuka have been identified as priority power REDUCING ENVIRONMENTAL LEGAL CONTRAVENTIONS stations to reduce water consumption. The power A total of 65 environmental legal contravention incidents were recorded during the year (2024: 68), with the reasons stations have identified site-specific water reduction Dry-cooled stations like Medupi, Kusile, indicated below. Sixty-two of the incidents occurred at coal-fired power stations (2024: 68), with two recorded actions that will be implemented within the framework Matimba and Kendal use air-cooled by Group Capital and one by NTCSA. Notably, Distribution and ERI did not record any environmental legal of the National Water Resource Strategy and managed condensers instead of water-intensive wet contraventions during the year. through Water Management Task Team forums. The cooling systems. This approach significantly identified actions focus on the following areas: reduces water consumption and avoids the 1 visible steam plumes typical of conventional 11 • Water recycling and reuse: Operating power cooling towers. stations under the Zero Liquid Effluent Discharge Philosophy by recycling and reusing water at the plant to reduce raw water intake. This includes recycling of treated effluent from sewerage plant 30 SPECIFIC WATER CONSUMPTION 2025 2024 for cooling and other processes 30 33 Despite not meeting target, specific water usage has • Advanced water treatment technologies: Techniques shown marginal improvement to 1.40 ℓ /kWh sent 37 are being explored at the stations to reduce the out (2024: 1.43ℓ /kWh sent out). Water performance need for raw water intake. This includes the use across the fleet continues to be negatively affected of water treatment techniques such as reverse by lower load factors and poor water management osmosis to treat effluent water for reuse at the practices, as well as the inability to conduct plant maintenance required to address the issues causing • Optimising cooling tower operations: Efficiency of Water Air quality Waste Environmental impact assessments poor water performance due to system constraints. cooling towers will be enhanced through improved maintenance and operational practices to minimise Focused monitoring of the effective implementation None of the environmental legal contravention We have established detailed operational plans to water loss due to evaporation and drift of water management action plans, both at power incidents were classified by the Environmental Incident address the risks and root causes of incidents of non- • Leak detection and repair: Regularly inspecting, station level and by the Generation Environmental Classification Committee as being the result of a compliance relating to relative particulate emissions, identifying and repairing leaks at the plant to reduce Compliance Steering Committee, have yielded results significant failure of business systems (2024: seven). water use and the release of polluted water by power water wastage with a slight improvement in water performance. stations. Altogether, 17 incidents have been reported to DFFE under section 30 of NEMAQA (2024: 19), 14 of which After completing the phasing out of materials occurred in Generation and three in Distribution. containing or contaminated by polychlorinated A total of 41 incidents were reported to DWS under biphenyls (PCBs) in FY2024, we have completed and section 20 of the National Water Act, 1998 submitted the final external PCB audit report to DFFE (2024: 36), with 40 of these recorded in Generation in compliance with the relevant regulations. and the remaining one in Distribution. Eskom’s Environmental Steering Committee and IR Detail on the disposal of ash, asbestos as well as the Generation Environmental Compliance Steering used nuclear fuel and nuclear waste is set out in the technical statistical table on page 140 Committee actively oversee our responses to compliance notices issued by regulatory authorities. Additionally, the Social, Ethics and Sustainability Committee closely monitors management’s progress on fulfilling our environmental compliance commitments. To meet our environmental compliance obligations and exercise our duty of care towards the environment, we have adopted an integrated approach that prioritises governance, performance management, skills development and training. 115 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment continued PROMOTING RESPONSIBLE ENHANCING WASTE MANAGEMENT PROVISIONS FOR ENVIRONMENTAL ENVIRONMENTAL STEWARDSHIP We are committed to protecting the health of RESTORATION AND REHABILITATION Safeguarding South Africa’s vultures: Eskom’s citizens and the environment by reducing pollution SUPPORTING BIODIVERSITY We have made provision for our environmental role in mitigating infrastructure risks and ecological degradation through effective waste Our operations impact and are affected by obligations related to the decommissioning of: biodiversity, including red data bird populations. South Africa’s critically endangered vultures management. A fundamental principle in this regard • Nuclear plant, including the rehabilitation of the We perform environmental impact assessments, – the Cape, white-backed and lappet- is to manage waste as close to the source as possible, associated land and the management of spent habitat restoration and conservation initiatives to faced vulture – face growing threats from while investigating and implementing ways to reduce, nuclear fuel assemblies and radioactive waste scientifically assess biodiversity risks and protect expanding infrastructure. Between 2020 and reuse, recycle and recover waste in line with DFFE’s • Other generating plant, including the rehabilitation vulnerable species. 2025, Vulpro recorded 191 vulture deaths waste hierarchy. of the associated land or injuries due to collisions with powerlines, Red data bird mortalities recorded during the year with incidents rising sharply in recent years. We achieve this by integrating circular economy • Cost-plus mines, where we are contractually reduced slightly to 210 (2024: 258), although the These birds often suffer severe burns and principles into our operations. Circularity is realised or constructively obligated to reimburse coal actual figure may be higher. trauma, particularly during storms or while through various initiatives, including: suppliers. This covers the estimated closure costs, roosting on power structures. • Recycling various waste streams including the rehabilitation of the associated land together with pollution control SR For more information on our partnerships and efforts • Selling ash and gypsum from coal-fired power We have partnered with Vulpro and other stations for reuse to mitigate the risk of our operations to vulnerable We have raised the following provisions relating to stakeholders to mitigate these risks. Key birdlife, refer to “Environmental management – • Beneficiation initiatives such as ash-based road environmental rehabilitation and restoration: Biodiversity” in the sustainability report initiatives include retrofitting high-risk construction powerlines, installing bird flight diverters and Actual Actual Actual aligning to DFFE’s Biodiversity Management • Mine backfilling using ash R million 2025 2024 2023 We have established integrated responsible land Plan for Vultures published in 2022. While • Replacing wooden poles with geopolymer poles and biodiversity management practices to minimise implementation challenges persist, we remain made from ash Power station-related the impact of our activities on ecosystems and committed to reducing avian mortality through • Soil amelioration projects environmental 16 068 23 679 21 824 to enhance ecosystem services. These mitigation infrastructure innovation and collaboration. restoration – nuclear interventions are often undertaken in collaborations Several ash beneficiation projects are undertaken plant with conservation organisations, local communities Encouragingly, some renewable energy to drive waste reduction and minimise the volume Power station-related and other stakeholders. operators have demonstrated success of ash being disposed of in ash facilities to prevent environmental 17 635 16 086 15 863 with bird-safe designs and operational the accumulation of legacy ash and its associated restoration – other Eskom has declared three nature reserves at Koeberg, adjustments, showing that conservation environmental risks. generating plant Ingula and Majuba power stations, focusing on Mine-related closure, and energy development can coexist once conserving biodiversity and promoting environmental pollution control and 14 240 13 280 13 113 renewable energy generation is rolled out on SR For more information on our activities directed at ash sustainability. These initiatives contribute to the rehabilitation a larger scale, by both IPPs and Eskom. beneficiation, refer to “Environmental management – protection of natural habitats and species, supporting Total 47 943 53 045 50 800 Coal ash beneficiation” in the sustainability report South Africa’s biodiversity heritage and the United We will continue to support research, Nations Sustainable Development Goals. We rehabilitation and education efforts to also manage land under conservation practices at protect South Africa’s birdlife and promote These efforts reflect our commitment to reducing  efer to notes 4.5 and 28 in the financial statements AFS R Thyspunt, Bantamsklip, Grootvallei, Majuba and Sere. sustainable energy practices. landfill dependency, and promoting resource for more information efficiency and sustainability across our operations. Through innovation, partnerships and sustainable land management, we seek to ensure that sustainable power does not come at the cost of biodiversity. We believe that energy and ecology can coexist through science-led approaches and responsible stewardship. 116 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment continued INVESTING IN RENEWABLE ENERGY which includes gas-to-power and battery storage Exco plays an essential role in governing, supporting ALIGNING SOUTH AFRICA’S POLICY AND Our direct investment in renewable generating projects, and the establishment of Eskom Green as and regularly engaging in discussions surrounding the REGULATORY ENVIRONMENT capacity has been modest to date, with one wind a separate subsidiary to spearhead investment and management of JET initiatives and climate change- Domestically, South Africa has made significant facility and six small hydroelectric stations. Although innovation in renewable energy. We are committed related matters. Progress on implementation of these strides in formalising its climate response. The we operate three pumped storage schemes with total to significantly increasing our renewable capacity to initiatives are regularly assessed through the monthly Climate Change Act, 2024, signed into law in installed capacity of 2 732MW, these stations are net reach our long-term objective of attaining net-zero JET Steering Committee, as well as Exco and Board July 2024 and effective from March 2025, provides consumers of electricity. emissions by 2050. meetings, to ensure that the organisation remains on a legal framework for mitigation and adaptation track towards its climate goals. Priority climate-related planning across sectors. Eskom is well-positioned During the year, our Sere Wind Farm contributed RESPONDING TO CLIMATE CHANGE risks are actively tracked and monitored to ensure to comply with the Act’s requirements, having 332GWh to the national grid (2024: 329GWh). Climate change remains one of the most urgent that they are being effectively addressed. already embedded climate risk management into our It maintained an average load factor of 36.33% and complex challenges of our time, with escalating governance and operational frameworks. (2024: 35.81%), which aligns to expectations for impacts on ecosystems, economies and communities. To ensure effective management of climate-related wind-based renewable plant, and recorded an average The past decade has been the warmest on record, issues, several subcommittees and positions have been The Act introduces mandatory carbon budgets for availability factor of 96.70% (2024: 97.40%). and the frequency and intensity of extreme weather established, including the Risk Subcommittee under high-emitting sectors (expected from 2026), building events continue to rise. As a major emitter and Exco, the Risk and Resilience Governance Committee, on Eskom’s prior participation in DFFE’s voluntary We purchase renewable energy from IPPs, mainly a central player in South Africa’s energy system, the JET Office, together with a senior manager carbon budget programme. In parallel, the Carbon from wind and solar projects, alongside smaller we recognise our responsibility to act decisively in responsible for climate change and sustainable Tax Act, 2019 is entering its second phase, with contributions from biomass, landfill gas and small support of a just, inclusive and climate-resilient future. development. National Treasury proposing to maintain electricity hydro technologies. Renewable IPPs contributed price neutrality between 2026 and 2030, to mitigate 17 420GWh during the year (2024: 17 851GWh), From a governance perspective, the Board is GLOBAL MOMENTUM: OUTCOMES FROM the socio-economic impacts of electricity affordability. constituting 8% of energy available for distribution for responsible for oversight and implementation of COP29 AND THE ROAD TO COP30 the year (excluding wheeling). Furthermore, most of Eskom’s business strategy, which incorporates the The 29 th United Nations Climate Change South Africa’s long-term emissions trajectory will our imported power is supplied by Cahora Bassa, a ambition to achieve net-zero emissions by 2050. The Conference (COP29) – held in Baku, Azerbaijan in be shaped by the transformation of the electricity hydroelectric station in neighbouring Mozambique. Board is supported by the Audit Committee and November 2024 – marked a pivotal moment in the sector, as outlined in the draft IRP 203 and enabled by the Risk Committee as well as the Social, Ethics and global climate agenda. With nearly 200 countries and the Transmission Development Plan. Eskom’s role in IR For information on the capacity of our power stations Sustainability Committee, which regularly review and over 56 000 delegates in attendance, the conference this transformation is vital to achieving the country’s and a breakdown of capacity supplied by IPPs, refer to evaluate the organisation’s progress on climate-related underscored the urgency of accelerating climate nationally determined contribution (NDC) under the page 145 issues through regular reports from management and action. Key outcomes included the adoption of a new Paris Agreement. discussions with experts in the field. This process collective quantified goal on climate finance, tripling ensures that the Board and its committees are kept support to developing countries to US$300 billion We have classified the inability to fully comply In aggregate, 11.3% of the power supplied during the informed of the latest developments in this field and annually by 2035, and the operationalisation of the with evolving climate change legislation and meet year was sourced from renewable energy sources in that they are equipped to make informed decisions on Loss and Damage Fund to assist vulnerable nations. associated emission reduction targets as a Priority 2 the form of solar, wind and hydro, with 84.2% being climate-related matters. under our risk management standard. All risks are supplied by coal and diesel, and 3.9% by nuclear COP29 also finalised the long-awaited Article 6 tracked through our risk management system, with (2024: 13.1%, 82.5% and 3.9% respectively). The The Board and its committees have to consider the Rulebook, establishing a robust framework for controls and treatment actions reviewed regularly. balance of 0.6% was derived from other sources impact of climate-related issues when evaluating international carbon trading. This development is (2024: 0.5%). and guiding the organisation’s overall strategy, particularly relevant for South Africa, where emerging ESKOM’S CLIMATE STRATEGY: MITIGATION key initiatives, risk management policies, annual carbon markets are expected to play a growing role in AND ADAPTATION IN ACTION We are steadfast in our commitment to transition budgets and business plans. This includes ensuring financing the energy transition. Our climate response is anchored in a dual strategy of from being a traditional base-load provider to a that performance objectives are aligned with the mitigation and adaptation, aligned with our ambition diversified energy leader, with a focus on flexible organisation’s ambition of achieving net-zero emissions Eskom actively participated in COP29, hosting and to achieve net-zero emissions by 2050. In FY2025, we and clean energy solutions. We have a pipeline of by 2050 and monitoring the implementation and contributing to seven high-profile events. These continued to move towards decarbonising our energy at least 2GW of clean energy projects ready for progress towards meeting these objectives, including engagements showcased our leadership in the Just mix by expanding our renewable energy pipeline, execution in the short to medium term. We will those to reduce emissions. The Board and its Energy Transition (JET), highlighted lessons from repowering coal-fired stations and investing in grid continue repowering and repurposing our stations committees also play a vital role in monitoring and Komati’s repurposing and explored innovative modernisation and smart technologies. independent of the station shutdown plan. Our managing climate-related risks and opportunities. financing models to unlock investment in grid strategic initiatives target the development of a infrastructure and renewable energy. 5.9GW clean energy pipeline in the longer term, 117 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment continued We have classified climate-related physical risks as • Financial integration of climate-related risks and Priority 2 under our risk management standard, opportunities Exxaro Resources and Eskom have formalised a strategic partnership through a Memorandum of recognising their potential to escalate into Priority 1 • Stakeholder engagement and capacity-building Understanding (MoU) concluded in April 2025. The MoU is centered on collaboration in reducing risks. These risks are tracked through our risk • Accurate and timely GHG emissions reporting carbon emissions, enhancing air quality and advancing the Just Energy Transition, aligning with South management system, with controls and treatment Africa’s commitment to the Paris Agreement and international environmental standards. actions reviewed regularly. As we navigate the complexities of the energy The primary focus of this partnership includes joint efforts to measure, manage and reduce scope 1, 2, transition, we remain committed to delivering on our Looking ahead, our updated climate change strategy mandate while contributing meaningfully to global, and 3 emissions; considering investments in innovative technologies to drive decarbonisation efforts; places renewed emphasis on: national and local climate goals. inclusive transition initiatives such as skills development and job creation in green sectors; and proactive stakeholder engagement to ensure climate resilience. It contains provisions for data sharing and • Continuous improvement in climate risk transparent reporting to track progress and ensure accountability. identification and management This collaboration underscores Eskom’s dedication to achieving our climate goals and enhancing the SR Refer to “Our climate change performance” in the sustainability report for more on our response to climate change sustainability of South Africa’s energy sector. ESKOM’S CARBON FOOTPRINT Our operational activities contribute to scope 1, 2 and 3 GHG emissions We have calculated our annual carbon Our GHG emissions footprint, while still significant, BUILDING CLIMATE RESILIENCE: ESKOM’S footprint expressed in tons of carbon dioxide equivalent (tCO2e) for the 2024 calendar year, using the same is on a declining trajectory. CO2 emissions for the ADAPTATION PLANS methodology as the prior year. The footprint was calculated in line with the globally recognised GHG Protocol: 2025 calendar year are anticipated to represent a Eskom’s infrastructure is increasingly exposed to A Corporate Accounting and Reporting Standard. reduction of just under 10% compared to 2019 levels, climate-related risks, including floods, wildfires and our share of national emissions has decreased and extreme heat. In FY2025, we advanced the 2024 2023 2022 to approximately 41%. We continue to disclose implementation of divisional and subsidiary climate GHG emissions by source, tCO2e calendar year calendar year calendar year our carbon footprint through platforms such as the adaptation plans, which were developed by Carbon Disclosure Project and we are strengthening multidisciplinary teams comprising environmental Scope 1 internal controls to ensure accurate and timely practitioners, engineers, disaster management Stationary combustion2 191 585 395 183 904 930 193 157 386 reporting. specialists and risk professionals. Eskom fleet vehicles 95 457 129 543 71 623 Fugitive emissions 84 718 85 762 65 712 These plans are guided by our organisation-wide IR T he results of our carbon footprint study for the Waste disposal 19 969 3 189 81 972 procedure for climate adaptation planning and are 2024 calendar year are set out in “Eskom’s carbon Non-combustion product use 23 263 10 925 9 689 aligned with the requirements of the Climate Change footprint” on this page Act. They have been formally adopted by governance Scope 2 committees and are monitored through annual Electricity and heat purchased3 55 554 131 899 85 171 Our targeted mitigation efforts include: reporting to the Climate Change and Sustainable • Accelerating deployment of wind, solar and Development Department. Scope 3 hydroelectric capacity through Eskom Green and Electricity purchased from IPPs 322 390 765 429 494 263 public-private partnerships Key adaptation measures include: Coal delivery to site – road and rail 2 716 425 3 717 648 4 900 752 • Retrofitting existing coal-fired units to improve • Applying high-resolution (8km) downscaled climate Waste treated by third parties 1 764 2 371 35 efficiency and reduce local pollutants projections developed with the CSIR to assess Business travel – use of employee vehicles 11 730 8 122 8 598 future exposure to extreme weather under the • Researching carbon capture and storage Business travel – air travel 17 023 11 129 3 621 IPCC’s RCP 4.5 and RCP 8.5 scenarios technologies and carbon utilisation through ash Business travel – vehicle rental 6 221 489 627 beneficiation • Prioritising infrastructure upgrades in high-risk provinces such as the Western Cape, KwaZulu- Total 4 194 939 909 188 771 436 198 879 449 • Expanding electric vehicle charging infrastructure Natal and Gauteng, where flooding and wildfires and rolling out of 7.2 million smart meters by 1. Years refer to calendar years, and not financial years as indicated elsewhere in the report. have already disrupted operations 2. For coal, an Eskom-specific annual weighted average net calorific value of 0.0184TJ/ton fuel was used based on the actual measured FY2030 • Strengthening emergency preparedness through value for 2024. national simulation exercises and integrated disaster 3. As electricity generation is Eskom’s main activity, scope 2 emissions are in principle accounted for as scope 1 direct emissions under the GHG Protocol. However, since 2022 we have included estimated energy losses on the transmission and distribution networks response protocols relating to electricity purchased from IPPs as scope 2. • Integrating climate risk into asset design, investment 4. Due to different scopes and input assumptions, the results are not directly comparable with our CO2 emissions reported in the table planning and business continuity strategies on page 112. 118 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Interacting with the environment continued The carbon footprint calculated based on the GHG Protocol guidelines covers all operational activities undertaken by an organisation. It involves different methodology and assumptions compared to DFFE’s regulated reporting requirements. Therefore, while the results of the 2024 carbon footprint study presented above may provide valuable insights, direct comparisons with regulated data may not be meaningful. As South Africa’s national electricity utility and the single highest emitter of GHGs, we rely heavily on fossil fuels – including coal and diesel – for electricity production. Consequently, scope 1 emissions contribute more than 98% to our emissions. Although the relative share of scope 3 emissions has increased since our first report in 2019, this is primarily due to expanding the coverage of our reporting. Since that base year, our carbon footprint has steadily declined. Reduction in Eskom’s carbon footprint 2024 191 808 802 55 554 3 075 553 2023 184 134 349 131 899 4 505 188 2022 193 386 382 85 171 5 407 896 2021 207 364 669 260 899 2020 201 375 875 248 240 2019 212 313 513 289 861 Scope 1 Scope 2 Scope 3 Our scope 1 emissions increased due to increased coal-fired electricity generation enabled by improved generation plant availability which has also significantly reduced loadshedding. Increased use of coal-fired power stations resulted in higher coal usage. Kusile Unit 5 was also brought into commercial operation. Scope 3 emissions increased due to improvements in data collection and reporting, together with the inclusion of ERI’s emissions since 2023. As in the prior year, we have accounted for electricity purchased from IPPs as scope 3 emissions, because it is not produced by Eskom. However, the purchased electricity being transmitted and distributed along our infrastructure incurs losses before reaching the end user. These losses are reported as scope 2 emissions, depending on the amount of electricity purchased from IPPs. Over the years, our carbon footprint reporting has seen significant improvements, driven by our dedication to understanding and minimising our environmental impact, and we aim to maintain this momentum. Our carbon footprint results will assist in setting attainable emission reduction targets to ensure that we remain sustainable. 119 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Growing our people Eskom’s success relies on the strength, expertise and dedication of our people to deliver on our mandate and strategic objectives. In 2025, we continued to build a skilled, diverse and resilient workforce through inclusive transformation; competitive remuneration and enhanced rewards to incentivise productivity; a strong safety culture; and targeted training. Our People Strategy is anchored in creating a high- performance, ethical culture that supports a future- proof Eskom in a transforming energy landscape. At Eskom, our purpose – powering growth sustainably Remuneration and benefits are aligned to market – is underpinned by a commitment to cultivating a norms, with bargaining unit employees receiving high-performance, ethical culture through our human salary increases of 7% across the board in July 2024 capital strategy. This aspirational culture is guided by together with a R10 000 once-off payment, while six foundational cornerstones: people prioritisation, managerial levels received an average increase of operational excellence, financial prudency, 7% in October 2024, which included a discretionary accountability, customer centricity, and being values- element granted to top performers as a retention driven. These principles shape how we engage with incentive. We awarded monthly production one another and with our customers, suppliers, bonuses to eligible employees for improving shareholder and investors, partners and communities. operational performance based on daily targets. To bring this culture to life through being leader-led, We also completed the process to address income we have embedded 10 strategic culture enablers to differentials in March 2025, thereby closing historical of our employees through exposure to air pollution • Positioning Eskom as an employer of choice by drive behavioural change, reinforce accountability and pay gaps to ensure fairness, transparency and and noise. Every effort is made to ensure that tailoring rewards and recognition practices to foster a workplace where integrity, innovation and compliance. The exercise commenced in FY2018, in these impacts are minimised. Our efforts reflect attract and retain talent; enhancing diversity, collaboration can thrive. response to income disparities identified at the time our commitment to a safe, inclusive and future-fit equity and inclusion; improving employee morale, by the then Department of Labour. Our workforce increased to 42 030, growing by workforce. health and wellbeing; and addressing risks such as 1 405 employees. We finalised the Diversity, Equity, The Board approved the reimplementation of a group employee fatigue during times of crisis We invested R1.5 billion in training and development • Developing a future-fit, productive and adaptable Inclusion and Belonging Strategy which will be short-term incentive scheme for FY2025 to drive during the year, with the Eskom Academy of Learning organisation able to meet the challenges of a implemented in FY2026, met our racial equity and operational performance excellence and employee delivering functional and technical training to more transforming electricity industry and changing disability targets, and appointed 51 learners with retention, which was approved by the shareholder as than 38 000 group employees using both in-person world of work disabilities under the Youth Employment Service required by the debt relief conditions. The scheme and online platforms. To strengthen our learner (YES) programme that provides work experience to has boosted morale and commitment, supported • Enhancing skills and capabilities across the group to pipeline, we enrolled 1 407 new learners in technical previously unemployed black youth in entry-level and the retention of scarce skills, and reinforced efforts close any identified gaps to deliver Eskom’s strategy and non-technical positions across the group. non-professional roles. to build a high-performance, ethical culture as and related strategic objectives evidenced by the significant improvements in technical The Human Capital and Remuneration Committee Eskom was recognised as a Top Employer in South performance. is committed to driving implementation of Eskom’s Africa by the global Top Employers Institute and as human capital priorities through our People Plan: a Top Gender Empowered Company by Standard We remain committed to our value of Zero Harm. In 2025, we strengthened occupational health and safety • Fostering a high-performance, ethical culture Bank Top Women, reaffirming our dedication to systems, reduced contractor-related safety incidents that fosters agility and innovation and prioritises fostering a diverse, inclusive and supportive workplace and expanded wellness programmes addressing accountability and consequence management where employees can thrive. The Grad Star Students mental health, grief, menopause and disability through effective performance management Choice Awards recognised Eskom as a Top Graduate Employer that graduates aspire to work for, cementing inclusion. We understand that our operations could our status as a preferred employer in the industry. have a negative impact on the health and wellbeing 120 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Growing our people continued We are dedicated to embedding the social aspect of our ESG plan into our operations as shown below. Social capital Human capital • Ensure fair JUST energy transition to • Prioritise employee sustainable energy sources wellbeing and development • Foster community welfare and support • Promote diversity and local development through CSI initiatives • Ensure sustainable supply chains by 1 inclusivity within the workforce through equity focusing on supplier development, initiatives industrialisation, and localisation • Become employer of choice by investing in employee Health and safety • Safeguard the wellbeing of all employees and contractors S skills and career growth • Encourage innovative ideas and solutions from employees • Strengthen safety protocols throughout the organisation 2 3 • Transform organisational culture to be a high- • Ensure the safe management performance ethical culture of waste, including nuclear and promote inclusivity of waste, including nuclear Employee complement by function These efforts are aimed at preserving jobs while ensuring our people remain agile and equipped to 2 410 WORKFORCE COMPOSITION AND The Eskom Workforce Plan ensures that current and support the transforming energy landscape. We are (6%) TRANSFORMATION future staffing requirements support our strategic also strengthening capacity in emerging focus areas, 5 814 OUR PEOPLE IN NUMBERS objectives. The latest iteration was developed and including our Renewables and Strategic Delivery (14%) Group headcount increased to 42 030 employees implemented during FY2025 and focuses on retaining 13 663 Units, to align with Eskom’s long-term strategic at the end of the year (2024: 40 625), including core and critical skills while driving transformation (33%) priorities. 612 learners under the YES programme. The targets and prioritising training and development. Employee complement by occupational level, number headcount increase also results from the appointment 42 030 Change in group headcount of core and critical skills in Generation and Eskom Top 14 Rotek Industries. 579 management (1%) Senior We recorded a gross attrition rate of 5.9% 15 731 management 17364 (2024: 5.7%), with 2 436 employee exits during (37%) 3 833 (9%) Middle management the year. However, we replaced skills at a higher and professionals 7 424 rate, with 3 841 employees appointed from the Generation NTCSA ERI 54 external market, together with 3 106 internal hires 42 030 Skilled 42 749 Group capital Distribution Corporate 23 077 40 625 40 421 39 601 (including promotions and internal transfers) to 27 advance our people. More than 90% of the group’s workforce is directly Semi-skilled 10 883 involved in the essential operations of generating, The introduction of external skills allows the 268 transmitting and distributing electricity to customers. Unskilled organisation to benefit from fresh perspectives and As the new build programme nears completion, we exposure to different practices, which encourages are proactively investing in upskilling, reskilling and continuous improvement and adaptability. However, redeploying employees across the business. the departure of experienced skills also results in the 2021 2022 2023 2024 2025 loss of valuable institutional knowledge, highlighting the importance of supporting new employees in Over the next five years, we aim to maintain our their understanding of our business operations and headcount at an upper limit of 42 602. organisational culture. 121 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Growing our people continued Eskom, like many organisations globally, faces a Racial equity by occupational level, % growing “expertise supply crisis” as a sizeable The Labour Court ruled in May 2024 that portion of our experienced workforce approaches Eskom had unfairly discriminated against a retirement. To address this, we have proactively white male employee. It found that Eskom’s identified critical roles most at risk of knowledge practice of not shortlisting members of loss through retirements in the next five years and non-designated groups for advertised posts are implementing structured knowledge transfer amounts to an absolute barrier and is not an 100.00 initiatives. These include digital platforms, mentorship 98.72 affirmative action measure as contemplated 90.46 90.44 94.96 92.70 programmes and succession planning frameworks 83.42 86.88 85.71 81.32 79.61 by the Employment Equity Act. Eskom filed 81.82 designed to capture institutional expertise and ensure for leave to appeal, on the basis that the continuity. Our goal is to increase the proportion of recruitment process allows for a second round critical roles with qualified internal successors, thereby of shortlisting where the initial round did not safeguarding operational resilience and supporting yield a suitable candidate. The second round long-term sustainability. expands the scope to include other race Top Senior Middle management Skilled Semi-skilled Unskilled groups. Judgment on the appeal is awaited. Employee complement by age, number management management and professionals Target Actual met target Actual almost met target (within 5% threshold) Actual did not meet target Gender equity by occupational level, % Racial and gender representation across the workforce 1 325 2 966 (7%) (7%) 15 951 14 853 3 704 (9%) 44.69 43.20 45.90 42.58 42.95 42.02 2 538 41.07 38.06 6 563 2 008 33.60 30.61 27.27 21.43 42 030 117 <20 21–30 31–40 41–50 51–60 >60 34 035 Top Senior Middle management Skilled Semi-skilled Unskilled (81%) TRANSFORMING OUR WORKFORCE management management and professionals Eskom is committed to building a workforce that Target Actual met target Actual almost met target (within 5% threshold) Actual did not meet target African Coloured reflects the rich diversity of South Africa. Guided by our Employment Equity Plan and aligned with the White Indian Employment Equity Act, 1998, our transformation  ur group and company employment equity performance at senior and middle management/professional level is set IR O efforts aim to foster a more inclusive, representative out in the statistical tables from page 143 and high-performing organisation that embraces 15 631 the unique backgrounds, perspectives and diverse (37%) talents of all employees. These efforts are also aligned While we have made notable progress in improving racial and gender representation at most levels, gender with the strategic intent of our shareholder and the representation remains below target at many levels. Our overall gender ratio moved to 63% male and 37% female 42 030 national transformation agenda. (2024: 64% and 36%), with a goal of achieving female representation at all levels of 40.72% by FY2028. The target for female representation at senior and executive level is 45%. 26 399 (63%) Male Female 122 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Growing our people continued These figures are consistent with recent data on We are also committed to the fair and inclusive Employees with disabilities by occupational level, South Africa’s economically active population, which representation of persons with disabilities. At year number comprises 81% African, 9% Coloured, 3% Indian and end, 1 308 employees (3.11% of the workforce) In May 2025, Eskom hosted the prestigious 7% white individuals. However, Eskom’s gender profile reported living with disabilities, (2024: 1 201 or 5 Chairman’s Awards to honour employees 180 whose exceptional contributions, has yet to reach full representativeness compared to 2.96%). This exceeds the national target of 2% set the national distribution, with approximately 46% of by the Department of Employment and Labour and leadership and commitment have shaped the economically active population being female and moves us closer to our internal target of 3.15%, in our journey of operational recovery and 438 54% male. line with the White Paper on the Rights of Persons cultural transformation. These awards with Disabilities. Ongoing efforts include awareness are a cornerstone of our employee value 1 308 proposition, reinforcing a culture of campaigns, virtual training platforms and the provision of tailored equipment to enhance accessibility. recognition, accountability and excellence. Aligned with Eskom’s core values, the 685 award categories spanned all leadership levels and operating units, celebrating The Eskom Women Advancement Programme (EWAP), implemented in FY2013, has been revised individuals who exemplify high performance, Senior management Skilled following a strategic review to ensure it continues to meet future business needs. This will include the collaboration and dedicated service. establishment of female employee resource groups (ERGs) in renewable energy and digital technologies, Middle management Semi-skilled and Special commendations were issued by rolling out holistic programmes to develop women in leadership and technical spaces, as well as driving an and professionals unskilled the Chairman to those leaders who played environment conducive to removing the barriers that affect women. a pivotal role in stabilising operational REWARDS AND RECOGNITION performance and restoring public trust Under this programme, we have developed a post-partum reintegration standard and implemented EMPLOYEE VALUE PROPOSITION AND during a critical period for the organisation. mothers’ rooms, to provide working mothers returning from maternity leave with lactation facilities at our head office as well as in six satellite offices across the country. These facilities are situated at Medupi, ENGAGEMENT At Eskom, our people are central to delivering on These recognitions are more than symbolic Majuba, Hendrina, Koeberg, the Eskom Academy of Learning and NTCSA’s base of operations in – they reflect our belief that people are at Simmerpan, Germiston. our mandate and driving sustainable growth. Our employee value proposition (EVP) is designed the heart of Eskom’s progress. By celebrating to foster a high-performance, ethical culture excellence, we inspire a culture where After year end, Dr Candice Hartley, our Chief People Officer, launched the next generation of our while cultivating a deep sense of belonging and employees feel seen, valued and motivated women’s programme: Eskom Women in Power (EWIP). The programme will be rolled out nationally as connectedness across the organisation. We aim to to contribute to a sustainable energy future. part of the revised Eskom People Strategy. EWIP is aligned with Eskom’s Diversity, Equity, Inclusion and Belonging Strategy and focuses on five priority areas: create an environment where every employee feels • Women in leadership: accelerating representation of women and strengthening leadership pipelines valued, supported and empowered to thrive. • Women in energy: advancing female participation across all energy disciplines, in both technical and non- Our EVP extends beyond traditional rewards and One of the channels through which we give our technical roles recognition. It includes market-aligned remuneration, employees a voice is the annual Human Capital • Governance of empowerment: embedding accountability, policies and practices that drive equity comprehensive benefits and access to first-rate Organisational Effectiveness Survey, which considers • Conducive environments: creating safe, inclusive and supportive workplaces with a focus on women development opportunities, both locally and the following dimensions: employee engagement, • Strategic partnerships: leveraging collaboration within and outside the energy sector to amplify impact internationally. Employees are exposed to diverse organisational culture and Eskom’s value proposition. career pathways and gain experience through The most recent survey saw a record 36.5% participation in large-scale infrastructure projects and participation rate, with improvements across all three emerging technologies. dimensions. Key areas for improvement – such as Our initiatives focus on enhancing representation across all occupational levels, particularly for women, youth and communication around unbundling, access to coaching To support wellbeing and flexibility, we have adopted mentorship, and recognition of achievements – are persons with disabilities. We are fostering a culture that celebrates diversity and promotes inclusivity through hybrid work practices that allow eligible employees being addressed through targeted action plans, targeted learning and development programmes, including EWAP and others delivered in partnership with to work remotely, balanced with on-site presence monitored at divisional and executive levels. academic institutions. These initiatives are designed to empower under-represented groups and ensure that every based on operational needs. This approach enhances employee has the opportunity to thrive and contribute meaningfully to Eskom’s future. work-life integration while maintaining productivity and collaboration. 123 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Growing our people continued Our engagement efforts include leadership site visits, Initiatives were developed across the organisation Target Target Target Target Actual Actual Actual executive communications and employee recognition Measure and unit 2028 2026 2025 met? 2025 2024 2023 to address the concerning LTIR trend seen in recent events. These initiatives are pivotal in reinforcing our years and promote continuous improvement. These culture, boosting morale and ensuring that employees Fatalities (employees and contractors), include collaboration, consultation and leadership – – – 3 5 5 remain connected to Eskom’s vision and purpose and number training focused on safety within our business to one another. Fatalities (public), number – – – 15 20 16 operations, as well as leadership onboarding, seminars Employee lost-time injury rate, index and workshops. The initiatives are bearing fruit, as REMUNERATION AND BENEFITS 0.29 0.30 0.30 0.23 0.29 0.26 demonstrated by the improvement in the employee (including occupational diseases) – groupSC Eskom’s remuneration and benefits framework is LTIR during the year. designed to attract, retain and motivate a skilled Despite our commitment to safety, we suffered one employee (2024: two) and two contractor fatalities Additional safety initiatives will be implemented and high-performing workforce, while remaining (2024: three) during the year. across all levels of the organisation to further reduce aligned with market benchmarks and shareholder expectations. Our approach balances financial workplace injuries and ill health as well as contractor- sustainability with the need to reward excellence In memoriam related incidents. We will support our workforce and support employee wellbeing. Our remuneration Our heartfelt condolences go to the families, friends and colleagues of the following to understand and manage safety-related risks by strategy is underpinned by principles of fairness, individuals who lost their lives while in service of Eskom and our customers. enhancing communication and occupational health transparency and alignment with Eskom’s turnaround and safety processes. objectives and subject to the conditions of the Eskom Cebo Clifford Zondo: Distribution contractor (28 June 2024) Debt Relief Act, 2023. July Samuel Khanye: Distribution employee (17 August 2024) HEALTH AND WELLNESS Eskom is committed to supporting the health and Ntate Elias Dibiloane: Generation contractor (30 November 2024) wellbeing of our employees through a range of IR For full information on remuneration principles proactive and inclusive programmes. These initiatives for non-executive directors, executives and staff, empower employees to make safe, healthy choices together with disclosure of relevant remuneration, The causes of these fatalities are shown below. through prevention, care, education and support. refer to “Leveraging governance for transformation – Remuneration report” from page 65 1 1 Regular medical surveillance protocols, fitness-for- 1 duty assessments and wellness campaigns help detect SAFETY AND WELLBEING and prevent occupational and lifestyle-related illnesses FOCUS ON SAFETY and injuries early. Sickness absenteeism rates remain Ensuring a safe and healthy working environment well below tolerance levels, which is due in part to 2025 2024 our hybrid work policy. for employees and contractors remains a priority, supported by Eskom’s occupational health and Through a free hotline, the employee assistance safety strategy. We enhance the wellbeing of our 2 programme offers confidential support for personal workforce by implementing measures that address and work-related challenges, including relationship various health and safety aspects in the workplace, issues both at home and at work, financial stress, including safety training, equipment maintenance 3 dealing with loss and grief, mental health concerns, as and setting out operating protocols. Employees are Fall from height/elevation Electrical contact Struck by moving object well as coping with work-related stress and fatigue. responsible for following operational guidelines and Utilisation of the service has increased slightly year- reporting safety concerns. on-year, indicating growing trust in mental health IR P ublic fatalities, including those related to coal haulage activities, are discussed under “Sustaining communities – services. We track our safety performance using the number of Public safety” on page 131 fatalities among employees and contractors, together with the lost-time injury rate (LTIR) for employees. The LTIR target reflected in the table below indicates The employee LTIR improved to 0.23 for the year (2024: 0.29). The primary contributors to lost-time incidents our tolerance level. In line with our value of Zero are falls from the same level, confirmed occupational diseases, vehicle accidents and incidents related to being Harm, the true target is zero. struck by or caught between objects. A total of 15 occupational diseases were confirmed during the year (2024: 37). As in the past, these relate mainly to noise-induced hearing loss incidents. 124 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Growing our people continued We have also expanded programmes addressing developing strong leadership capabilities to address We have partnered with universities, further training Based on the results of our skills audit concluded issues that affect employees beyond the workplace, business challenges through mandatory training for all and education colleges, state-owned entities, industry in October 2022, we are prioritising interventions such as dealing with disability, mental health supervisory and managerial employees. Mandatory leaders and international partners to facilitate across several proficiencies, including technical and challenges, loss and grief, and navigating menopause, training includes business acumen, management knowledge exchange on digital transformation, plant knowledge; business acumen and financial to foster a more informed and compassionate fundamentals and supervisory development. These thereby ensuring the effective integration of advanced literacy; leadership and management capabilities; workplace culture. Internal capacity to support initiatives include the Management Development technologies into training programmes. Data analytics, and understanding the broader energy industry and employee wellbeing has been strengthened through Programme, Top Talent Programme and Talent cybersecurity and AI training programmes are being associated regulations. We continue to monitor targeted training of the relevant professionals. Programme for Millennials. implemented to empower employees to enhance and report progress on closing skills gaps identified Nevertheless, there has been an increase in the their digital literacy, improve operational efficiency, against the baseline. We have recorded significant number of employees diagnosed with mental health ensure compliance and equip employees with skills to improvement on all initiatives, with the most notable illnesses, signalling a rise in psychosocial stressors. adapt to evolving best practice. being an increase in training spend and the number This requires more deliberate and tailored wellness We have partnered with local organisations of employees trained, together with an increase programmes, as well as treatment of causes emanating such as the Energy and Water Sector Despite allocating significant resources to training in the number of accredited training centres and in the workplace. Education Training Authority (EWSETA), and development to support employees and the elimination of lapsed workplace accreditations. Finance and Accounting Services Sector organisational performance, it is concerning that We are planning a follow-up skills audit in FY2027, Education and Training Authority (FASSET) training interventions remained reactive and focused with preparations to commence in the coming year. SR For more information on employee wellbeing on addressing current business needs, with limited initiatives, please refer to the sustainability report and Duke Corporate Education to upskill over one hundred women in the energy emphasis on future skills requirements. All areas are and finance sectors. This initiative supports being encouraged to prioritise future-focused training LEARNING AND DEVELOPMENT our diversity dividend objective. These interventions, particularly in digital transformation, Our development efforts are aligned with Eskom’s candidates graduated over the past energy transition and leadership development. People Plan and the strategic priorities of the Human two years, strengthening organisational Capital and Remuneration Committee, which transformation and contributing to include fostering a high-performance, ethical culture, leadership diversity. building critical skills with the capacity to innovate and positioning Eskom as an employer of choice. The Eskom Academy of Learning (EAL) is being We are implementing training programmes to repositioned to address competency gaps and support address technical competency gaps to ensure that the future-readiness by delivering streamlined, high- workforce is equipped with the required knowledge impact learning solutions. The EAL is being converted and skills to deliver Eskom’s strategic objectives. into a smart campus using digital technologies and The growing importance of renewable energy renewable energy training to foster innovation and competencies has necessitated the fast-tracking of adaptability, to address emerging business needs and renewable energy technology training through the EAL future skills requirements. This will improve Eskom’s smart campus to support the JET strategy. The training compliance, operational performance and ability will leverage advanced technologies such as artificial to meet the evolving energy sector demands. This intelligence (AI), machine learning, virtual reality (VR) transformation will revolutionise employee training, and augmented reality (AR) to simulate generation increase asset utilisation and reduce operational scenarios to enhance practical learning and operational costs, while contributing to national socio-economic readiness. We will establish additional training facilities development. at Komati and Grootvlei to further expedite renewable The Leadership Development Unit within the EAL energy training as part of our repowering and will enhance leadership capabilities and strengthen repurposing programme of older power stations. the leadership pipeline through succession planning and talent management programmes. This will sustain leadership excellence and adaptability in response to the evolving energy landscape. Eskom is focusing on 125 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Growing our people continued LEARNER PIPELINE Learners who have successfully completed their trade PEOPLE RELATIONS AND CONSEQUENCE In addition, Eskom and its recognised unions have Eskom’s learner pipeline is a cornerstone of our test certifications are now equipped to enter the MANAGEMENT established a restructuring consultative framework, long-term workforce sustainability strategy. As we job market, having gained valuable experience and Eskom’s three recognised trade unions – National which supplements the recognition agreement, to navigate a generational shift in our employee base, qualifications through our structured development Union of Mineworkers (NUM), National Union guide consultation during organisational restructuring. we are proactively investing in the next generation of programmes. This transition supports national of Metalworkers of South Africa (NUMSA) and talent to ensure continuity, innovation and resilience employment objectives while reinforcing Eskom’s role The Board and management remain committed to Solidarity – play a vital role in representing and to drive sustainable growth. Our learner programmes as a catalyst for socio-economic upliftment. driving accountability and effective consequence protecting the interests of unionised employees. are designed not only to address the challenges management. This will address governance and At Eskom, unions engage actively in negotiations on posed by an ageing workforce, but also to meet our FURTHER STUDIES compliance challenges and support the fight against remuneration and conditions of service, ensuring broader social responsibility commitments by creating Eskom recognises that investing in employee crime, fraud and corruption, to put the organisation fair and transparent agreements. They are also meaningful opportunities for young South Africans. development is not only a strategic imperative, but on a more sustainable path. In support of a disciplined, key stakeholders in discussions around major also a catalyst for long-term organisational resilience respectful and productive work environment, we have organisational changes, such as the unbundling At the end of the year, our learner pipeline and transformation. During the year under review, established clear disciplinary and grievance procedures process, helping to safeguard employee rights as part comprised 2 609 individuals, representing 8% of 930 employees took advantage of the opportunity for both bargaining unit and managerial employees. of the transition. Through established and approved Eskom’s permanent company workforce, significantly to participate in further education programmes – structures, unions raise members’ concerns with Disciplinary procedures outline fair and consistent exceeding our 2.5% target. This reflects a 25% 70% of whom were women – demonstrating our Eskom, fostering open dialogue and constructive processes to address alleged misconduct, with year-on-year increase in learners, underscoring our commitment to inclusive growth and empowerment. resolution of workplace issues. employees being entitled to representation. The goal commitment to skills development. Approximately 80% of learners are employed in technical fields. These employees pursued qualifications ranging is not only punitive when needed, but also corrective, The relationship with our recognised trade unions from certificates to doctorates, with more than to encourage positive behaviour and reinforce is governed by a recognition agreement that Learner pipeline, number 70% working toward a bachelor’s degree or higher. alignment with Eskom’s values. Grievance procedures promotes constructive engagement through good This investment in human capital development provide employees with a structured and confidential faith bargaining, consultation and information sharing. 537 supports our broader transformation agenda and way to raise concerns about workplace conflict, unfair 654 The agreement relies on various participative ensures that our workforce remains agile, future-fit treatment or dissatisfaction, The aim is to resolve structures that ensure employee voices are heard and and equipped to meet the evolving demands of the issues constructively and uphold a culture of mutual respected at all levels of the organisation: transforming energy sector. respect, teamwork and professionalism. • Strategic Forum: A high-level platform where Eskom 2 609 and union leadership discuss strategic priorities and 272 IR F or more on how we monitor the effectiveness of principles our ethics and anti-corruption initiatives, refer to • Central Bargaining Forum: The primary forum for “Leveraging governance for transformation – Fighting national consultations on matters affecting the 611 crime, fraud and corruption” on page 75 entire organisation, involving management, union 535 officials and full-time shop stewards Artisans Plant operators Non-technical • National Group Divisional Forum: Focuses on issues impacting specific divisions, with participation from Engineers Technicians management together with full-time and part-time shop stewards Excluding learners participating in the YES programme. • Business Unit Forum: Addresses topics within the authority of business unit management, with input from local management and part-time shop stewards • Steering committees: These ensure the effective functioning of all forums at national, group, and business unit levels 126 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Sustaining communities We are committed to creating lasting value for CUSTOMER CENTRICITY the communities in which we operate, recognising Education Enhancing skills in critical areas through bursary schemes, We are focused on customer centricity to remain the that our social licence to operate is rooted in trust, and skills learnerships and capacity-building programmes that support distributor of choice in an evolving electricity supply transparency and collective progress. As we continue industry. As customers increasingly seek energy development the objectives of improving education and innovation to make strides in turning around performance and independence through renewable and embedded delivering on our commercial mandate to provide self-generation technologies, we recognise the reliable and sustainable electricity supply, we also need to diversify our product and service offerings embrace our developmental responsibilities – Promoting enterprise and supplier development to drive to remain relevant and adapt to changing needs. Economic supporting economic empowerment, job creation, inclusive economic growth and foster small business Furthermore, we are prioritising improving reliability empowerment skills development, transformation and universal participation, aligned with employment growth priorities of supply and restoration time of faults to support access to electricity across South Africa. customer retention and satisfaction. We acknowledge the impact of Eskom’s past To this end, we are exploring innovative value-added challenges on our stakeholders and are actively Community and Expanding electrification projects and supporting rural services and enhancing customer service delivery working to rebuild public confidence through infrastructure development, directly addressing access to electricity and through: an ethical high-performance culture, improved development infrastructure backlogs • Access to renewable energy through wheeling, stakeholder engagement and a renewed focus on the green tariffs and energy trading platforms customer experience. We strive to be a customer- • Energy management services, including smart centric organisation that delivers world-class customer Driving investments in renewable energy projects to meet meters, sensors and controllers that enable service and are committed to protecting members Just Energy the NDP’s clean energy targets and support the low-carbon real-time load management, either to improve of the public from the hazards of our operations and Transition (JET) customer energy efficiency or to support load infrastructure, while educating communities on the economy limiting for continuity of supply safe use of electricity. • Flexible services such as demand response, remote Our socio-economic transformation plan comprises control of geysers, as well as solar PV and battery Maximising local manufacturing and supplier capacity 37 initiatives across five focus areas, reinforcing Localisation and systems to support network stability to strengthen South Africa’s industrial base and create our commitment to a competitive, sustainable and industrialisation • Digital technologies, analytics and communication sustainable jobs platforms that enhance customer integration and inclusive energy future. empower customers through self-service channels These initiatives are designed to sustain and uplift • Operational improvements, such as faster communities through electrification, job creation, quotation and connection times, timely resolution economic inclusion as well as infrastructure and of queries and faults, improved meter reading and skills development. Our JET is central to this effort, billing accuracy for conventional meters, as well as ensuring that the shift to a low-carbon future is proactive notifications for planned and unplanned inclusive and equitable, particularly for communities outages dependent on the coal value chain. Our newly reintroduced demand management programme promotes load management and energy efficiency by encouraging customers to reduce consumption during peak demand periods. This aids customers in better managing their energy use, while supporting stability of the national grid. For further information, refer to https://www.eskom.co.za/distribution/demand- management-programme/ 127 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Sustaining communities continued The growth in customer numbers has slowed steadily in recent years due to challenging economic Our Distribution Division has embarked on conditions and the increasing adoption of alternative Converting customers to smart meters a programme to transition its vehicle fleet supply sources and embedded self-generation To address non-technical losses, we are converting conventional and prepaid meters to smart meters to electric vehicles (EVs) to reduce Eskom’s technologies by some customer categories. – prioritising customers most likely to be involved in the use of illegal tokens – and installing smart carbon footprint and stimulate growth in the The decline over the past year is mainly attributable meters for all new customer connections. Around 800 000 smart meters have been installed as part South African e-mobility market. We are to a 0.7% reduction in residential customers, our of our digitalisation and metering infrastructure refurbishment programme as well as our electrification planning to establish and install fast-charging largest customer category. programme. Altogether, we are targeting the replacement and electrification of 7.2 million smart stations for public use, capable of fully meters over the next three years. charging a medium-sized EV within one hour at market-related tariffs. IR Detailed customer information, including sales per Once fully operational, smart meters will enable optimised management of distributed energy customer category, is set out in the supplementary resources, such as microgrids, enable improved theft and tamper detection, provide real-time visibility We plan to expand our fleet with 875 EVs information on page 148 of outages, as well as support meter reading and fault-finding services. Real-time monitoring will and roll out 238 e-mobility charging stations also help identify overloaded equipment and improve the implementation of load limiting to protect over the next five years, scaling up to around The key revision number (KRN) rollover project, equipment and improve service delivery. 4 300 EVs (or 50% of the fleet) by 2035. completed in November 2024, successfully recoded By year end, 10 charging stations had been legacy prepaid meters from KRN 1 to KRN 2, Customers will benefit from real-time access to their energy usage, instant outage and service installed at five pilot sites. updating a total of 7.2 million meters. At the notifications, as well as the ability to participate in new pricing structures and enjoy new products and same time, we conducted a comprehensive data services, including demand response programmes, load management services and EV capabilities. We are conducting impact assessments by monitoring the utilisation and charging analysis and account clean-up exercise, identifying patterns of the EV fleet to inform optimal approximately 2.2 million customers who were either sizing, suitable tariffs and network capacity buying tokens from ghost vendors or had tampered CUSTOMER SERVICE planning for future charging stations. with their meters; these are referred to as zero Customer satisfaction is measured on a continuous basis using a range of perception-based surveys. In addition, the integration of solar PV or buyers. renewable microgrids at charging sites will Target Target Target Target Actual Actual Actual A dedicated zero buyers reduction programme has Measure and unit 2028 2026 2025 met? 2025 2024 2023 help to realise the full environmental benefits been implemented to regularise these accounts. of EV adoption. By year end, around 900 000 accounts had been Key Customer Delight, % 80.0 80.0 80.0 86.8 88.1 88.4 corrected, with roughly 1.3 million zero buyers Customer Delight, index 3.7 3.6 3.6 4.1 4.4 3.6 remaining. Number of customers Key Customer Delight performance, which measures We recognise that energy theft and losses are systemic the satisfaction of large industrial customers, remains You can chat to Alfred, our friendly chatbot, at any issues, in part due to the country’s socio-economic time at https://alfred.eskom.co.za/chatroom/ +1.6% +1.5% +1.4% -0.7% challenges. We are engaging with community leaders above target. The scores for all service dimensions or on WhatsApp at 08600 37566 to encourage high-risk communities to play an active remain above the target of 80%, except for reliability role in managing electricity infrastructure and promote of supply which scored 79% due to the impact of load the safe use of electricity. We are also prioritising the curtailment and loadshedding as well as unplanned disconnection and normalisation of illegal connections network outages. and conducting meter audits to detect and resolve meter tampering. Interventions are underway to The Customer Delight index is a composite customer address the risk of illicit prepaid electricity tokens, perception measure, based on customer satisfaction 6 857 029 6 969 164 7 074 672 7 172 296 7 120 090 including the replacement of Eskom’s online vending following interaction with customer care channels, as well as operational performance metrics related to Alternatively, put the power in your hands and system. download the MyEskom Customer app in your billing accuracy, planned outages and the resolution of app store. customer issues or queries. We have successfully met our customer service targets for the year and remain committed to offering convenient access to customer care through digital 2021 2022 2023 2024 2025 and self-service channels. 128 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Sustaining communities continued OUR CONTRIBUTION TO SUPPLIER DEVELOPMENT ENTERPRISE AND SUPPLIER DEVELOPMENT We invested R7 million in enterprise development, Target Target Target Target Actual Actual Actual exceeding our target of R5 million (2024: R6.1 million). Measure and unit 2028 2026 2025 met? 2025 2024 2023 Various initiatives were conducted to support small Preferential procurement, % of TMPSSC 80.00 80.00 80.00 93.21 74.35 72.80 and medium enterprises (SMMEs), including training on business skills, tender requirements and other Procurement from black-owned (BO) suppliers, % of TMPS 40.00 40.00 40.00 51.02 38.82 42.48 key topics. Over 1 120 SMMEs benefited from development opportunities through these initiatives. Procurement from black women-owned Our contribution to supplier development amounted 12.00 12.00 12.00 11.60 8.29 7.21 (BWO) suppliers, % of TMPS to R12.3 billion, exceeding the target of R6 billion Procurement from black youth-owned (2024: R8.3 billion), mainly due to subcontracting. 2.00 2.00 2.00 5.17 4.53 4.26 (BYO) suppliers, % of TMPS Looking ahead, we are pursuing more impactful Procurement spend with suppliers owned targets to enhance the outcomes of our enterprise by black persons with disabilities (BPwD), 1.00 1.00 1.00 0.42 0.10 0.18 and supplier development initiatives in line with the % of TMPS B-BBEE Codes. Over the next three years, we aim to Procurement spend with qualifying small invest a total of R27 billion in supplier development, 15.00 15.00 15.00 7.54 4.50 4.39 enterprises (QSE), % of TMPS mainly due to procurement spend with developing suppliers, and R230 million in enterprise development Procurement spend with exempted micro 15.00 15.00 15.00 7.03 4.65 5.86 programmes. enterprises (EME), % of TMPS We continuously strive to align to national Despite a decrease in TMPS to R220.3 billion for transformation imperatives to unlock growth, support the year (2024: R240.4 billion), attributable spend localisation and industrialisation, create employment with B-BBEE compliant suppliers increased to and contribute to skills development in South R205.4 billion (2024: R178.8 billion), resulting in Africa through our procurement and supply chain improved procurement equity across all designated management practices. groups. We continue to monitor supplier compliance and request suppliers to maintain valid B-BBEE Eskom is recognised as a level 3 B-BBEE contributor, certification to reduce the extent of spend with with our status independently recertified in non-compliant suppliers. February 2025. This year, we achieved our highest performance to date in the skills development We have made a concerted effort to support small category, driven in part by our continued support black-owned businesses by hosting workshops to for Government’s Youth Employment Service address the underperformance on procurement with (YES) programme. While our performance in the BPwD, QSE and EME groups. Our procurement policy management control category was negatively affected is under revision and, once implemented, is expected by gender equity in top management due to executive to improve support for these designated groups. vacancies at the time of the recertification, this has since been addressed through a restructured Exco. During the year, we awarded 1 786 contracts at Our positive procurement equity performance was company level, achieving 93.79% local content recognised, although opportunities remain to improve (2024: 1 309 contracts, with 90.72% local content). procurement spend with certain designated groups. Of these, 362 contracts were related to designated sectors, resulting in 85.83% local content spend in designated sectors (2024: 203 contracts, with 60.34% local content for designated sectors). 129 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Sustaining communities continued MAXIMISING OUR SOCIO-ECONOMIC CONTRIBUTION Target Target Target Target Actual Actual Actual Supply chain SD&L Measure and unit 20281 2026 2025 met? 2025 2024 2023 Leveraging Eskom’s procurement Total electrification connections, spend to achieve maximum and 128 661 41 340 44 974 83 031 114 800 102 590 number sustainable local development Corporate social investment Stakeholder management Skills development 452.2 146.1 146.1 146.2 93.1 63.0 Execution of stakeholder Internal and external skills committed spend, R millionSC management activities development to support the Corporate social investment, 2 100 000 600 000 450 000 1 203 566 272 217 438 094 to ensure appropriate national skills development number of beneficiaries positioning with all 6 agenda stakeholders 1. The 2028 target is the cumulative target over the next three years. 5 1 ELECTRIFICATION CORPORATE SOCIAL INVESTMENT We continue to connect previously disadvantaged The Eskom Development Foundation NPC (the DEVELOPMENT households and farm dwellings in Eskom’s licensed Foundation), our wholly owned subsidiary, is areas of supply through the Government-funded responsible for executing Eskom’s CSI strategy to 2 4 electrification programme. Universal access to achieve critical developmental goals and improve Sponsorships Corporate social electricity remains a national development priority the quality of life within the communities where we Sponsorships to support 3 investment to improve the welfare of South Africans, with the operate. Our CSI strategy aims to create an enabling causes to promote our Social intervention with a goal of connecting 97% of households to the national environment that maximises the impact of our reputation and brand developmental intent that grid. The remaining 3% – largely located in remote socio-economic contributions through six key levers. is external to the core and rural areas – will be served through non-grid- CSI initiatives are focused on education, health, the business function based solutions, such as microgrids, where grid-based environment, enterprise development, food security, Socio-economic development solutions are impractical. rural communities, infrastructure development and Projects including infrastructure and socio-economic upliftment. community development During the year, 83 031 households were connected to the grid, exceeding the target due to the During the year, the Foundation implemented electrification of additional dwellings in underserved communication campaigns to enhance CSI impact areas, such as informal settlements, and rollovers from by business units across the group, resulting in a prior years. significant increase in CSI outcomes. Education The Foundation delivered several impactful community CSI projects in FY2025, including the completion of remains the largest area of investment, accounting for a community multi-purpose centre in Empangeni, KwaZulu-Natal and disaster relief for communities affected We are targeting the installation of containerised R38.2 million of total CSI spend. Developing future by flooding. Disaster-relief efforts included the provision of essential goods and the construction of 26 mobile microgrid units to address rural electrification skills pipelines for Eskom and South Africa remain a classrooms for five schools in KwaZulu-Natal. challenges. These will be prioritised for hospitals, key objective of our CSI strategy, with a focus on all clinics, schools and essential services centres in levels of education, from early childhood development vulnerable communities. The microgrids will leverage to tertiary education, and a strong emphasis on SR For further information, please refer to the 2025 sustainability report, which highlights a selection of our flagship CSI renewable technologies, such as solar PV, to electrify Science, Technology, Engineering, Mathematics and projects previously unserved areas. A regulatory framework Innovation (STEMI) disciplines. for microgrids is being developed in collaboration with During the year, the Foundation also concluded strategic partnerships with organisations that share our CSI NERSA and other stakeholders to establish guidelines ambitions – including Transnet, the National Development Agency (NDA) and the Small Enterprise Development and standards for implementation of microgrid and Finance Agency (SEDFA) – to better leverage resources and funding and maximise our collective impact going technology. forward. Looking ahead, future initiatives will include support for community electrification programmes, development of SMMEs, incubation and localisation in support of B-BBEE, as well as opportunities linked to Eskom’s JET. 130 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Sustaining communities continued JUST ENERGY TRANSITION The R&R programme has been decoupled from Construction of a climate-smart horticulture facility PUBLIC SAFETY Our JET strategy seeks to balance the three pillars of station operations and decommissioning schedules, at Grootvlei commenced in November 2024, in We remain committed to public safety in line with the energy trilemma – energy security, affordability and allowing R&R projects at these stations to proceed in partnership with the Netherlands. Work was halted our value of Zero Harm. Nationwide public safety sustainability – to drive a fair, inclusive and equitable parallel with continued operations. This is intended to in December 2024 to facilitate further stakeholder campaigns continue to play a vital role in educating the transition to a low-carbon economy. A “just” transition alleviate security of supply risks while transitioning to a engagement. Work recommenced in January 2025, public on the safe use of electricity and the dangers requires a people-centred approach that prioritises cleaner energy mix over time. but heavy rains made construction impossible. The of electrical contact. Key focus areas include raising job creation, addresses the needs of workers and site remained waterlogged and inaccessible until awareness about the hazards of illegal connections, surrounding communities affected by the shutdown of Several milestones were achieved at the Komati pilot year end. Construction is scheduled for completion overloaded electrical outlets and risks associated ageing coal-fired power stations and ensures alternative site during the year: in FY2026, with the facility expected to become with purchasing prepaid electricity from unauthorised economic opportunities. • Construction of the aquaponics system and operational by 31 March 2026, complemented with vendors. We also encourage the public to avoid and agrivoltaics plant was completed the necessary training. report low-hanging power lines, meter tampering The strategy is based on five E’s – employment, • Assembly lines for the manufacture of containerised and vandalism of electrical infrastructure in their environment, economy, equity and energy – to guide microgrids have been established. Construction of communities. IR Refer to “Sustainability indicators selected for the transition and ensure a balance between social, 13 microgrid units, which commenced in FY2024, reasonable assurance” from page 150 for more economic and environmental imperatives. was concluded in May 2024 against a target of information on the targets and outcomes of Sadly, we recorded 15 public recordable fatality 30 units, due to limited orders and delays in the microgrid assembly line at Komati and the incidents (PRFIs) during the year, with 12 electrical IR Refer to “Our strategic and risk landscape securing planned funding. We have engaged with horticulture facility at Grootvlei contact and three motor vehicle incidents – Repositioning Eskom for sustainability in a stakeholders and secured commitments for FY2026 (2024: 20 PRFIs, with 10 electrical contact and transforming industry” from page 42 for further to support our electrification programme through 10 motor vehicle incidents). Looking ahead, ash beneficiation centres for information the deployment of containerised microgrids brickmaking and road filling are being established at Given the impact of our coal haulage operations • A fully accredited training centre has been Camden, Grootvlei and Hendrina, along with steel on road safety and infrastructure, we continue to REPOWERING AND REPURPOSING established, offering technical training in welding, fabrication facilities. Construction of the solar PV plant promote driver and vehicle safety and participate We have conducted socio-economic impact solar PV installation, aquaponics and agrivoltaics, and battery storage system at Komati is scheduled to in road safety awareness campaigns. Regrettably, assessment (SEIA) studies at 10 coal-fired power as well as enterprise development, ethics, basic commence during FY2026. Furthermore, a copper supplier coal haulage by road resulted in 11 public stations to understand the implications of their finance and small business operations through the recycling plant at Komati is expected to be completed fatalities during the year (2024: 12). shutdowns on local communities. The studies Eskom Academy of Learning and other partnership by the end of FY2026, to produce 130 tons of copper found that, while shutdowns would reduce negative agreements cables annually. Engagements with various multilateral To strengthen our public safety efforts, we climate change impacts and improve air quality and development finance institutions are underway to have established working relationships with key Lessons learned from the Komati pilot are being stakeholders, including Sasol, Transnet, PRASA, water availability, unmitigated shutdowns would applied to initiatives at other stations. R&R plans support these initiatives. have far-reaching socio-economic consequences the Railway Safety Regulator and SANRAL. for Camden, Grootvlei and Hendrina have been We continue to engage with affected communities We convene a quarterly public safety forum to for surrounding communities due to job losses and approved and several initiatives for economic reduced economic activity along the coal value chain. in close collaboration with local and provincial collaborate on initiatives aimed at minimising public diversification have commenced. R&R plans for Arnot government. We are also working with technical injuries and fatalities. In response, we will be prioritising repowering and and Kriel are undergoing engagement and finalisation, and vocational education training colleges to expand repurposing (R&R) projects at six stations (Komati, with implementation planned for 2029. the reach of our training centres and align training Camden, Grootvlei, Hendrina, Arnot and Kriel). curricula with worker and community needs. Over the next five years, the R&R programme aims to add 3 233MW of additional renewable capacity through solar PV, wind, battery storage and synchronous condensers, leveraging existing grid infrastructure. The programme is expected to create over 1 800 permanent and 16 000 temporary jobs, primarily in renewable energy and manufacturing industries, supported by training and skills development for workers and affected communities. 131 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Supplementary information Abbreviations and glossary of terms 133 Leadership qualifications and directorships 136 Technical and non-technical statistics 140 Plant and customer information 145 Environmental implications of using or saving electricity 149 Sustainability indicators selected for reasonable assurance 150 Independent sustainability assurance report by Deloitte & Touche 153 Disclosure of information under the PFMA 155 Deviations, expansions and variations reported to National Treasury 161 Corporate information 164 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Abbreviations ACI African, Coloured and Indian GWh Gigawatt-hour = 1 000MWh NEMAQA National Environmental Management: Air Quality Act, 2004 AEL Atmospheric emissions licence HCRC Human Capital and Remuneration Committee NERSA National Energy Regulator of South Africa (a Board committee) ARC Audit and Risk Committee (a Board committee) which was NNR National Nuclear Regulator approved for separation into a distinct Audit Committee and IASB International Accounting Standards Board (part of the NTCSA National Transmission Company South Africa SOC Ltd Risk Committee in February 2025 (both are Board committees) IFRS Foundation) OCGT Open-cycle gas turbine (see glossary) B-BBEE Broad-based black economic empowerment IFC Investment and Finance Committee (a Board committee) OCLF Other capability loss factor (see glossary) BESS Battery energy storage system IFRS® International Financial Reporting Standards OEM Original equipment manufacturer BOPC Business Operations Performance Committee IPP Independent power producer (see glossary) (a Board committee) PCLF Planned capability loss factor (see glossary) IRP Integrated Resource Plan CCMA Council for Conciliation, Mediation and Arbitration PFMA Public Finance Management Act, 1999 ISSB International Sustainability Standards Board (part of the CSA Coal supply agreement IFRS Foundation) PPA Power purchase agreement CSI Corporate social investment King IV King IV Report on Corporate Governance for PRFI Public recordable fatality incident (see glossary) South Africa, 2016 DEE Department of Electricity and Energy PV (Solar) photovoltaic kℓ Kilolitre = 1 000 litres DFFE Department of Forestry, Fisheries and the Environment RC Risk Committee (a Board committee) KPI Key performance indicator DFI Development finance institution RCA Regulatory clearing account kt Kiloton = 1 000 tons DMPRRP Department of Mineral and Petroleum Resources RE-IPP Renewable energy independent power producer kV Kilovolt = 1 000 volts DoA Delegation of authority RMIPPPP Risk Management Independent Power Producer Procurement kWh Kilowatt-hour = 1 000 watt-hours (see glossary) Programme DWS Department of Water and Sanitation kWhSO Kilowatt-hour sent out SADC Southern African Development Community EAF Energy availability factor (see glossary) LTIR Lost-time injury rate (see glossary) SAIDI System average interruption duration index EBITDA Earnings before interest, taxation, depreciation and amortisation and fair value adjustments MES Minimum Emission Standards SAIFI System average interruption frequency index ECA Export credit agency Ml Megalitre = 1 million litres SALGA South African Local Government Association ERI Eskom Rotek Industries SOC Ltd MOI Memorandum of Incorporation SAPP Southern African Power Pool ESP Electrostatic precipitator mSv Millisievert SARS South African Revenue Service EUF Energy utilisation factor (see glossary) Mt million tons SES Social, Ethics and Sustainability Committee (a Board committee) Exco Executive Management Committee MVA Megavolt-ampere = 1 million volts SIU Special Investigating Unit FFP Fabric filter plant MW Megawatt = 1 million watts SOC State-owned company FGD Flue gas desulphurisation MWh Megawatt-hour = 1 000kWh SSEG Small-scale embedded generation GCE Group Chief Executive MWhSO Megawatt-hour sent out TMPS Total measured procurement spend GCFO Group Chief Financial Officer MYPD Multi-year price determination TWh Terawatt-hour = 1 000GWh GDP Gross domestic product NECOM National Energy Crisis Committee UAGS Unplanned automatic grid separations GIS Group Investigations and Security Department NEDCSA National Electricity Distribution Company of UCLF Unplanned capability loss factor (see glossary) South Africa SOC Ltd GSC Governance and Strategy Committee (a Board committee) WANO World Association of Nuclear Operators NEMA National Environmental Management Act, 1998 GW Gigawatt = 1 000 megawatts 133 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Glossary of terms Arrear debt as percentage of revenue Gross arrear debt written off (relating to electricity receivables only) divided by gross electricity revenue multiplied by 100 Base-load plant Largely coal-fired and nuclear power stations, designed to operate continuously Cash interest cover (ratio) Provides a view of the company’s ability to satisfy the interest burden on its borrowings by utilising cash generated from operating activities. It is calculated as net cash from operating activities divided by net interest paid (interest paid on financing activities less interest received from financing activities) Current ratio (The current portion of inventory, payments made in advance, trade and other receivables and taxation assets) divided by (the current portion of trade and other payables, payments received in advance, provisions, employee benefit obligations and taxation liabilities) Daily peak Maximum amount of energy demanded by consumers in one day Debt/equity including long-term provisions Net financial assets and liabilities plus non-current retirement benefit obligations and non-current provisions divided by total equity Debt service cover (ratio) Cash generated from operations divided by (net interest paid from financing activities plus debt securities and borrowings repaid) Decommission To remove a facility (e.g. reactor) from service and either store it safely or dismantle it Demand-side management Planning, implementing and monitoring activities to encourage consumers to use electricity more efficiently, including both the timing and level of demand EBITDA margin EBITDA as a percentage of revenue (excluding revenue not recognised due to uncollectability) Electricity operating costs per MWh Electricity-related costs (primary energy costs, employee benefit costs plus net impairment loss and other operating expenses, less other income) divided by total electricity sales in GWh multiplied by 1 000 Electricity revenue per kWh Electricity revenue (including electricity revenue not recognised due to uncollectability) divided by total kWh sales multiplied by 100 Embedded derivative Financial instrument that causes cash flows that would otherwise be required by modifying a contract according to a specified variable such as currency Energy availability factor (EAF) Measures power station availability, taking account of both planned and unplanned energy losses under the control of plant management, as well as other non-controllable energy losses Energy efficiency Programmes to reduce energy used by specific end-use devices and systems, typically without affecting services provided Energy utilisation factor (EUF) Ratio of actual electrical energy produced during a period of time divided by the total available energy capacity. It is a measure of the degree to which the available energy capacity of an electricity supply network is utilised. Available energy capacity refers to the capacity after all unavailable energy (planned and unplanned energy losses) has been taken into account, and represents the net energy capacity made available to the System Operator or national grid Fatality A fatality is an incident occurring at work, or arising out of or in connection with the activities of persons at work, or in connection with the use of plant or machinery, in which or in consequence of which, any person (an employee, contractor, or member of the public) dies, regardless of the time intervening between the injury and/or exposure to the cause and death. The date of the incident will reflect the date on which the incident occurred, irrespective of the date of death Forced outage Shutdown of a generating unit, transmission line or other facility for emergency reasons or a condition in which generating equipment is unavailable for load due to unanticipated breakdown Free basic electricity Amount of electricity deemed sufficient to provide basic electricity services to a poor household (50kWh per month) Free funds from operations Cash generated from operations adjusted for working capital Gross debt Debt securities and borrowings plus finance lease liabilities plus the after-tax effect of provisions and employee benefit obligations Gross debt/EBITDA ratio Gross debt divided by earnings before interest, taxation, depreciation, amortisation and fair value adjustments Independent non-executive director A director who (a) is not a full-time salaried employee of the company or its subsidiary nor a shareholder representative; (b) has not been employed by the company in any executive capacity in any of the past three financial years; (c) is not a professional advisor, significant supplier or customer of the company; and (d) is not receiving remuneration contingent on the performance of the company Independent power producer (IPP) Any entity, other than Eskom, that owns or operates, in whole or in part, one or more independent power generation facilities Kilowatt-hour (kWh) Basic unit of electric energy equal to one kilowatt of power supplied to or taken from an electric circuit steadily for one hour Lead independent director (LID) Acts as a sounding board for the Chairman and can lead or chair Board meetings in the Chairman’s absence or when he has a conflict of interest. The LID can assist with amplifying the voice of other board members and resolving problematic board dynamics. The LID will also lead the Chairman’s performance appraisal Load Amount of electric power delivered or required on a system at any specific point Load curtailment Typically, larger industrial customers reduce their demand by a specified percentage for the duration of a power system emergency. Due to the nature of their business, these customers require two hours’ notification before they can reduce demand Load management Activities to influence the level and shape of demand for electricity so that demand conforms to the present supply situation, long-term objectives and constraints 134 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Glossary of terms continued Loadshedding Scheduled and controlled power cuts that rotate available capacity between all customers when demand is greater than supply in order to avoid blackouts. Distribution or municipal control rooms open breakers and interrupt load according to predefined schedules. Use of the term loadshedding typically includes the concept of load curtailment Lost-time injury (LTI) A work injury which arises out of and in the course of employment and which renders the injured employee or contractor unable to perform his/her regular/normal work on one or more full calendar days or shifts other than the day or shift on which the injury occurred. It includes occupational diseases and fatalities Lost-time injury rate (LTIR) Proportional representation of the occurrence of lost-time injuries over 12 months per 200 000 working hours Major incident An interruption on the transmission network with a severity ≥1 system minute Maximum demand Highest demand of load within a specified period Non-technical losses Energy losses due to electricity theft through illegal connections, tampering and bypassing of electricity meters, as well as the purchase of electricity tokens from unregistered or illegal vendors. It includes meter reading and billing errors Occupational disease/illness Any confirmed disease/illness arising out of, and in the course of, an employee’s employment, that is listed in Schedule 3 of the Compensation for Occupational Injuries and Diseases (COID) Act, 1993, or any other condition as determined by an occupational medical practitioner Off-peak Period of relatively low system demand Open-cycle gas turbine (OCGT) Liquid fuel turbine power station that forms part of peak-load plant and runs on kerosene or diesel. Designed to operate in periods of peak demand Other capability loss factor (OCLF) Energy losses outside of a station’s control as well as internal non-engineering constraints Outage Period in which a generating unit, transmission line, or other facility is out of service Peak demand Maximum power used in a given period, traditionally between 7:00 and 10:00 as well as 18:00 to 20:00 in summer; and 6:00 to 9:00 as well as 17:00 to 19:00 in winter Peaking capacity Generating equipment normally operated only during hours of highest daily, weekly or seasonal loads Peak-load plant Gas turbines, hydroelectric or a pumped storage scheme used during periods of peak demand Planned capability loss factor (PCLF) Energy losses due to planned maintenance on power station units, whether due to full shutdowns or partial load reduction Primary energy Energy from natural resources, e.g. coal, diesel, uranium, sunlight, wind and water Public recordable fatality incident (PRFI) An incident resulting in the electrocution of a member of the public by coming into contact with Eskom apparatus within the point of supply, as well as any work-related incident where an Eskom employee or contractor is responsible for the death of a member of the public. It excludes electrocution resulting from criminal activities or incidents where a member of the public is solely at fault. A minor being electrocuted as a result of criminal activity will, however, be regarded as a PRFI Pumped storage scheme A lower and an upper reservoir with a power station/pumping plant between the two. During off-peak periods the reversible pumps/turbines use electricity to pump water from the lower to the upper reservoir. During periods of peak demand, water runs back into the lower reservoir through the turbines, generating electricity Reserve margin Difference between net system capability and the system’s maximum load requirements (peak load or peak demand) Return on assets EBIT divided by the regulated asset base, which is the sum of property, plant and equipment, trade and other receivables, inventory and future fuel, less trade and other payables and deferred income Sustainability Refers to practices that can be maintained without harming the environment, society or the economy, and considers future generations. It involves finding a balance between the needs of the present and the ability of future generations to meet their own needs System minutes Global benchmark for measuring the severity of transmission network interruptions to customers. One system minute is equivalent to the loss of the entire system for one minute at annual peak. A major incident is an interruption with a severity ≥1 system minute Technical losses Naturally occurring losses that depend on the power systems used Unit capability factor (UCF) Measure of availability of a generating unit, indicating how well it is operated and maintained Unplanned capability loss factor (UCLF) Energy losses due to outages are considered unplanned when a power station unit has to be taken out of service and it is not scheduled at least four weeks in advance Used nuclear fuel Nuclear fuel irradiated in and permanently removed from a nuclear reactor. Used nuclear fuel is stored on site in used fuel pools or storage casks Watt The watt is the International System of Units’ (SI) standard unit of power. It specifies the rate at which electrical energy is dissipated (energy per unit of time) Wheeling Refers to the movement of electricity between international customers through Eskom’s network, without the power being available to customers on the South African grid 135 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Leadership qualifications and directorships BOARD OF DIRECTORS AT 31 MARCH 2025 Mteto (M) Nyati (60) Leslie (LA) Mkhabela (52) Lwazi (LL) Goqwana (49) Chairman Lead independent director (LID) Independent non-executive director Independent non-executive director Independent non-executive director Appointed to Board in October 2022 Appointed to Board in October 2022; Appointed to Board in October 2022; appointed as Chairman in October 2023 appointed as LID in January 2025 Qualifications and designations B Sc (Hons) Mechanical Engineering Qualifications and designations Qualifications and designations (University of Cape Town) B Sc Mechanical Engineering B Juris (University of Limpopo) MBA (Milpark Business School) (University of KwaZulu-Natal) LLB (University of Limpopo) Pr Eng (Engineering Council of South Africa) PhD (Honoris Causa) Information Technology Admitted Attorney Management (University of Johannesburg) Directorships Directorships Allpides (Pty) Ltd Directorships China Africa Joint Arbitration Centre Johannesburg NPC Infrastructure Specialist Group (Pty) Ltd Accelerated Growth Partners (Pty) Ltd Dunocol (Pty) Ltd MPA Consortium Ammoa (Pty) Ltd Escap SOC Ltd National Society of Black Engineers of South Africa NPC Business Systems Group (Africa) (Pty) Ltd Jordigraph (Pty) Ltd Paminar (Pty) Ltd Sako Green Energy (Pty) Ltd Khomanani Group (Pty) Ltd Rocla (Pty) Ltd The Collective X NPC Mkhabela Huntley Attorneys Inc Technicrete ISG (Pty) Ltd Wazo Investments (Pty) Ltd Roodt Mkhabela Inc Technicrete Mining Services (Pty) Ltd The Arbitration Foundation of Southern Africa NPC Zepide Group (Pty) Ltd Dan (DL) Marokane (53) Group Chief Executive Clive (CR) le Roux (73) Executive director Fathima (FBB) Gany (49) Independent non-executive director Appointed to Board in March 2024 Independent non-executive director Appointed to Board in October 2022 Appointed to Board in October 2022 Qualifications and designations Qualifications and designations B Sc Chemical Engineering Qualifications and designations B Sc Electrical Engineering (cum laude) (University of Cape Town) B Accounting Sciences (Unisa) (University of Witwatersrand) M Sc Petroleum Engineering B Compt (Hons) (Unisa) Advanced Executive Diploma in Leadership (University of London) Certificate of Theory in Accounting (Unisa) (Unisa) DIC (Imperial College London) Chartered Accountant (SA) MBA (University of Cape Town) Advanced Certificate in Auditing Directorships Certificate in Strategy Design (GIBS) None Directorships Certificate in Strategy Execution (GIBS) Energy Council of South Africa NPC Ayanda (APZ) Mafuleka (45) Directorships Independent non-executive director Calib (C) Cassim (53) Air Chefs SOC Ltd Appointed to Board in October 2022 Group Chief Financial Officer Kunjali Consulting (Pty) Ltd Executive director Kunjali Investment Holdings (Pty) Ltd Qualifications and designations Appointed to Board in July 2017 South African Airways SOC Ltd B Com Management South African Airways Technical SOC Ltd (University of KwaZulu-Natal) Qualifications and designations South African Post Office SOC Ltd B Compt (Hons) (Unisa) B Com (University of KwaZulu-Natal) Certificate in Advanced Financial B Accounting Sciences (Unisa) Management (University of Johannesburg) Chartered Accountant (SA) Chartered Accountant (SA) Master of Business Leadership (Unisa) Directorships Directorships Escap SOC Ltd Escap SOC Ltd Ages are shown at 31 March 2025. Netball SA Investment Holdings NPC Eskom Enterprises SOC Ltd Only active directorships and memberships are reflected. Rand Water Foundation NPC Eskom Finance Company SOC Ltd 136 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Leadership qualifications and directorships continued BOARD OF DIRECTORS AT 31 MARCH 2025 continued Dr Tsakani (TL) Mthombeni (45) Tryphosa (T) Ramano (53) Dr Claudelle (C) von Eck (54) Independent non-executive director Independent non-executive director Independent non-executive director Appointed to Board in October 2022 Appointed to Board in October 2022 Appointed to Board in October 2022 Qualifications and designations Qualifications and designations Qualifications and designations B Sc (Hons) Electrical Engineering B Com (University of Cape Town) BA Psychology (University of (University of Cape Town) Postgraduate Diploma in Accounting Witwatersrand) M Sc Electrical Engineering (University of Cape Town) Diploma in Business Management (Clarkson University) Chartered Accountant (SA) (Institute of Accounting and Commerce) PhD Electrical Engineering Certified Director (Institute of Directors (Clarkson University) Directorships South Africa) Denel SOC Ltd Master of Business Leadership (Unisa) Directorships GBVF Response Fund1 NPC DPhil Leadership (Change Management) KPTL Investments (Pty) Ltd K2021862248 (South Africa) (Pty) Ltd (University of Johannesburg) Royal Bafokeng Platinum Ltd Kwaheri Psychiatry (Pty) Ltd Longmarket Capital Directorships Bheki (B) Ntshalintshali (71) National Transmission Company South Africa SOC Ltd Brave Inflexions (Pty) Ltd Independent non-executive director Public Investment Corporation SOC Ltd Mapungubwe Institute for Strategic Reflection NPC Appointed to Board in October 2022 Solidarity Response Fund NPC MVE Horizons Human Capital Solutions cc Tumaini Psychiatry (Pty) Ltd Qualifications and designations The International Women’s Forum South Africa NPC Comparative Industrial Relations Urithi Psychiatry (Pty) Ltd (Ruskin College) University of Pretoria Diploma in Industrial Relations (Allenby College) Dr Busisiwe (CB) Vilakazi (41) Directorships Independent non-executive director National Labour and Economic Appointed to Board in October 2022 Development Institute NPC Qualifications and designations The Rand Mutual Assurance Company Ltd B Sc Electrical Engineering (University of Witwatersrand) M Sc Engineering (University of Witwatersrand) MBA (University of Witwatersrand) PhD Engineering Science (University of Oxford) Directorships Macsteel Service Centres SA (Pty) Ltd Milpark Bee Investment (Pty) Ltd National Transmission Company South Africa SOC Ltd Ndilantswa Group (Pty) Ltd Sako Green Energy (Pty) Ltd Stadio Holdings Ltd Ages are shown at 31 March 2025. Only active directorships and memberships are reflected. 137 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Leadership qualifications and directorships continued EXECUTIVE MANAGEMENT COMMITTEE AT 31 MARCH 2025 Dan (DL) Marokane (53) Roman (RA) Crookes (52) Nontokozo (NY) Hadebe (47) Group Chief Executive Group Executive: Group Capital Group Executive: Strategy and Appointed to Exco in March 2024 Appointed to Exco in November 2024 Sustainability 6 years in Eskom (including 2010 to 2015) 16 years in Eskom (including 1999 to 2016) Appointed to Exco in November 2024 <1 year in Eskom Qualifications and designations Qualifications and designations B Sc Chemical Engineering (University of B Sc Mechanical Engineering (University of Qualifications and designations Cape Town) Witwatersrand) B Sc (Hons) Biochemistry (University of M Sc Petroleum Engineering (University of M Sc Mechanical Engineering (University of Zululand) London) Witwatersrand) Certificate Programme in Leadership DIC (Imperial College London) Development (University of Witwatersrand) MBA (University of Cape Town) Directorships Master of Business Leadership (Unisa) None Postgraduate Diploma in Financial Strategy Directorships (University of Oxford) Energy Council of South Africa NPC Leonard (LM) de Villiers (68) Chief Technology and Directorships Calib (C) Cassim (53) Information Officer None Group Chief Financial Officer Appointed to Exco in November 2024 Appointed to Exco in July 2017 <1 year in Eskom Dr Candice (CBH) Hartley (44) 23 years in Eskom Chief People Officer Qualifications and designations Appointed to Exco in March 2025 Qualifications and designations National Diploma in Electronic Data <1 year in Eskom B Com (University of KwaZulu-Natal) Processing (Tygerberg Technical College) B Accounting Sciences (Unisa) Global Information and Telecommunications Qualifications and designations Chartered Accountant (SA) Industries (Insead Business School) BA Psychology (University of Johannesburg) Master of Business Leadership (Unisa) Delivering Information Services and BA (Hons) Psychology (University of Information Technology (Harvard Business Johannesburg) Directorships School) Postgraduate Diploma in Business Escap SOC Ltd Administration (University of Pretoria) Eskom Enterprises SOC Ltd Directorships MBA (University of Pretoria) Eskom Finance Company SOC Ltd iMas Finance Co-operative Ltd PhD Business (University of Cape Town) Professional Provident Society (PPS) Insurance Company Ltd Monde (ML) Bala (51) Moyo Business Advisory (Pty) Ltd Directorships Group Executive: Distribution Southbend 3365 cc None Appointed to Exco in June 2023 28 years in Eskom Qualifications and designations B Sc Electrical Engineering (University of Cape Town) Graduate Diploma in Industrial Engineering (University of Witwatersrand) Master of Engineering (University of Witwatersrand) Directorships Eskom Enterprises SOC Ltd Ages are shown at 31 March 2025. Eskom Rotek Industries SOC Ltd Only active directorships and memberships are reflected. National Electricity Distribution Company of The NTCSA board approved the secondment of Mr Monde Bala, Group Executive: South Africa SOC Ltd Distribution, to the role of interim CEO of NTCSA from 1 August 2025. Ms Agnes Mlambo is acting as Group Executive: Distribution. 138 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Leadership qualifications and directorships continued EXECUTIVE MANAGEMENT COMMITTEE AT 31 MARCH 2025 continued Portia (PB) Mngomezulu (49) Bheki (BJ) Nxumalo (56) Group Executive: Corporate Services Group Executive: Generation Appointed to Exco in November 2024 Appointed to Exco in June 2023 <1 year in Eskom 28 years in Eskom Qualifications and designations Qualifications and designations B Com Accounting (Unisa) National Diploma in Chemical Engineering Postgraduate Diploma in Business (Mangosuthu University of Technology) Administration (University of Pretoria) National Higher Diploma in Chemical MBA (Gordon Institute of Business Science) Engineering (Vaal University of Technology) MBA (North West University) Directorships Harpo Corporation (Pty) Ltd Directorships BJ Zwide Nozalo (Pty) Ltd Rivoningo (RP) Mnisi (43) Eskom Enterprises SOC Ltd Group Executive: Renewables Eskom Rotek Industries SOC Ltd Appointed to Exco in February 2025 Fountaindale Farming (Pty) Ltd <1 year in Eskom Takuwani Holdings (Pty) Ltd Qualifications and designations Alfred (AE) Seema (52) B Tech Industrial Engineering (University of Group Executive: Strategic Delivery Johannesburg) Appointed to Exco in December 2024 B Sc (Hons) Applied Science (University of <1 year in Eskom Pretoria) MBA (Gordon Institute of Business Science) Qualifications and designations B Sc Chemical Engineering (University of Directorships Cape Town) Bhubezi Minerals Resources (Pty) Ltd MBA (Henley Business School) B Com Financial Management (Unisa) Directorships None Ages are shown at 31 March 2025. Only active directorships and memberships are reflected. 139 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Technical statistics Measure and unit 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Safety Employee lost-time injury rate (LTIR) – group, index1 0.23RA 0.29RA 0.26RA 0.24RA 0.22RA 0.30 RA 0.31RA 0.24 0.39 0.30 Fatalities (employees and contractors), number 3 5 5 6 11 9 7 14 10 17 Employee fatalities, number 1 2 2 4 3 – 3 3 4 4 Contractor fatalities, number 2 3 3 2 8 9 4 11 6 13 Customer statistics Number of customers 7 120 090 7 172 296 7 074 672 6 969 164 6 857 029 6 716 201 6 497 372 6 258 616 5 976 557 5 688 640 Key Customer Delight, %2 86.8 88.1 88.4 85.0 86.2 81.5 81.7 79.5 107.0 104.3RA Arrear debt as % of revenue, % 6.28 3.95 4.80 3.91 3.24 3.69 4.30 RA 2.73RA 2.42 1.14 Debtors days – municipalities, average debtors days 215.7 212.6 179.3 149.6 140.7 116.1 94.3RA 76.6RA 53.3RA 42.9 Debtors days – large power top customers excluding disputes, average debtors days 15.1 15.5 14.5 14.6 15.0 14.6 13.5RA 13.9RA 15.3RA 15.5 Debtors days – other large power users (<100 GWh p.a.), average debtors days 14.9 16.5 16.3 17.5 17.5 17.0 17.2RA 16.6RA 16.8 RA 16.2 Debtors days – small power users (excluding Soweto), average debtors days 45.9 45.2 46.2 47.7 50.1 44.1 42.6RA 43.4RA 48.8 RA 48.2 Sales and revenue Total sales, GWh3 189 723 183 311 188 401 198 281 191 852 205 635 208 319 212 190 214 121 214 487 Growth/(decline) in GWh sales, % 3.5 (2.7) (5.0) 3.4 (6.7) (1.3) (1.8) (0.9) (0.2) (0.8) Electricity revenue, R million 338 901 294 061 257 837 244 461 202 644 197 307 177 312 174 905 175 094 161 688 Growth/(decline) in revenue, % 15.2 14.0 5.5 20.6 2.7 11.3 1.4 (0.1) 8.3 10.5 Electricity output Power sent out by Eskom stations, GWh 195 702 184 576 191 307 205 688 201 400 214 968 218 939 221 936 220 166 219 979 Coal-fired stations, GWh 179 426 166 607 171 131 184 568 183 553 194 357 200 210 202 106 200 893 199 888 Nuclear power station, GWh 8 409 8 172 9 803 12 355 9 903 13 252 11 580 14 193 15 026 12 237 Pumped storage stations, GWh 4 649 4 386 4 081 4 743 4 795 5 060 4 590 4 479 3 294 2 919 Gas turbine stations, GWh 2 176 3 634 3 018 1 826 1 457 1 328 1 202 118 29 3 936 Hydroelectric stations, GWh 710 1 448 3 060 1 943 1 387 688 1 029 709 579 688 Wind energy, GWh 332 329 214 253 305 283 328 331 345 311 IPP purchases, GWh 19 365 20 183 17 957 15 973 13 526 11 958 11 344 9 584 11 529 9 033 Energy imports from SADC countries, GWh 7 570 9 150 8 654 8 500 8 812 8 568 7 355 7 731 7 418 9 703 Wheeling, GWh 2 028 2 449 2 904 2 499 2 310 2 491 2 750 2 266 2 910 3 930 Total electricity available (generated by Eskom and purchased), GWh 224 665 216 358 220 822 232 660 226 048 237 985 240 388 241 517 242 023 242 645 Consumed by pumped storage stations, GWh4 (6 064) (5 710) (5 504) (6 434) (6 625) (6 629) (5 981) (6 031) (4 808) (4 046) Total available for distribution, GWh3 218 601 210 648 215 318 226 226 219 423 231 356 234 407 235 486 237 215 238 599 Supply and demand Total peak demand on integrated power system, MW 33 485 33 873 34 666 35 005 34 155 34 510 35 345 35 769 34 913 34 499 Peak demand on integrated power system after load curtailment, MW 31 416 27 854 30 808 31 953 31 470 32 948 34 256 35 457 34 122 33 343 Loadshedding implemented, number of days 13 329RA 280 RA 65 47 46 30 0 0 81 1. The employee LTIR includes occupational diseases and fatalities. 2. This measure was introduced in FY2020 and is calculated on a 12-month moving average. Prior to FY2020, the comparatives are for Eskom KeyCare. 3. The difference between electricity available for distribution and electricity sold is mainly due to energy losses. 4. Used by Eskom for pumped storage facilities and synchronous condenser mode of operation RA Reasonable assurance provided by the independent assurance provider for the respective year. Refer to pages 153 to 154 for the independent sustainability assurance report relating to FY2025. 140 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Technical statistics continued Measure and unit 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Infrastructure Total Eskom power station capacity – installed, MW 53 193 52 451 52 451 51 866 51 115 49 517 48 029 48 039 46 407 45 075 Total Eskom power station capacity – nominal, MW 46 866 46 788 46 788 47 145 46 466 45 117 44 172 45 561 44 134 42 810 Total IPP power station capacity – nominal, MW 7 495 7 495 7 110 6 831 6 083 5 206 4 981 4 779 5 027 3 392 Total transmission lines, km 33 367 33 367 33 234 33 233 33 198 33 027 32 698 31 951 32 220 31 957 Total transmission transformer capacity, MVA 161 223 160 748 160 468 160 148 159 127 153 135 152 415 151 105 147 415 143 440 Total distribution lines and underground cables, km 377 814 375 760 371 979 371 625 366 388 358 757 354 935 349 643 352 492 345 330 Total distribution transformer capacity, MVA 147 387 146 927 146 073 146 131 155 623 153 814 145 097 134 632 129 168 101 197 Asset creation Generation capacity installed and commissioned, MW 799RA 0 RA 799RA 794RA 1 598 RA 1 588 RA 0 RA 2 387 1 332RA 794RA Transmission lines installed, km 292.6RA 74.4RA 326.1RA 180.5RA 65.6RA 127.9RA 378.7RA 722.3 585.4RA 345.8 RA Transmission transformer capacity installed and commissioned, MVA 2 620 RA 23RA – RA 1 065RA 750 RA 250 RA 540 RA 2 510 2 300 RA 2 435RA Total capital expenditure – group (excluding capitalised borrowing costs), R billion 41.1 37.0 33.9 30.2 23.9 23.4 33.9 48.0 60.0 57.4 Plant performance Energy availability factor (EAF), %1 60.60 RA 54.56RA 56.03RA 62.02RA 64.19RA 66.64RA 69.95RA 78.00 RA 77.30 RA 71.07RA Planned capability loss factor (PCLF), %1 12.76RA 12.04RA 10.39RA 10.23RA 12.26RA 8.92RA 10.18 RA 10.35RA 12.14RA 12.99 Unplanned capability loss factor (UCLF), %1 26.05RA 32.34RA 31.92 25.35 20.04 22.86 18.31 10.18 9.90 14.91RA Other capability loss factor (OCLF), %1 0.59RA 1.06RA 1.66 2.40 3.51 1.58 1.56 1.47 0.66 1.03 Unit capability factor (UCF), %1 61.18 55.62 57.69 64.42 67.70 68.22 71.51 79.47 78.00 72.10 Generation load factor, %1 47.2 44.6 45.7 49.5 49.0 52.6 54.4 55.9 57.9 58.8 OCGT load factor, % 10.3 17.2 14.3 8.7 6.9 6.3 5.7 0.6 0.1 18.6 Unplanned automatic grid separations (UAGS trips), number1 699 593 736RA 697RA 527RA 594RA 517 333 444 469 Integrated Eskom system load factor (EUF), %1 77.8 81.8 81.5 79.8 76.3 79.0 77.8 71.6 75.0 82.7 Network performance Total system minutes lost for events <1, minutes 4.37RA 3.29RA 4.71RA 2.88 RA 3.48 RA 4.36RA 3.16RA 2.09RA 3.80 RA 2.41RA Major incidents ≥1 minute, number 4RA 1 1 2 2 3 3 0 0 1 System average interruption frequency index (SAIFI), events2 11.7 11.7 11.8 12.3RA 13.2RA 14.4RA 14.9RA 17.5RA 18.9RA 20.5RA System average interruption duration index (SAIDI), hours2 34.9RA 34.9RA 35.5RA 35.5RA 35.4RA 36.9RA 38.0 RA 34.9RA 38.9RA 38.6RA Technical and other losses, GWh 25 339 23 502 23 879 24 811 25 078 23 457 23 292 21 086 21 399 19 895 Total energy losses, % 12.3 12.0 11.8 11.5 11.8 10.4 10.2 9.1 9.3 8.5 Transmission energy losses, % 2.4 2.2 2.3 2.3 2.3 2.2 2.2 2.0 2.2 2.6 Distribution energy losses, % 10.4 RA 9.9RA 9.7RA 9.6RA 10.1RA 8.8 RA 8.5RA 7.7RA 7.6RA 6.4 Primary energy Coal stock, days 79 80 65 76RA 82 81 67 68 74 58 Coal purchased, Mt 107.3 107.5 98.4 108.7 110.0 119.3 118.3 115.3 120.3 118.7 Coal burnt, Mt 106.2 99.5 102.4 110.3 104.9 108.6 113.8 115.5 113.7 114.8 Average calorific value, MJ/kg 19.89 19.62 19.42 19.64 19.82 19.08 19.24 19.81 20.05 19.57 Average ash content, % 30.96 31.79 32.13 31.39 31.24 29.65 30.98 30.92 28.62 28.19 Average sulphur content, % 0.80 0.77 0.79 0.83 0.82 0.78 0.84 0.87 0.84 1.07 Overall thermal efficiency, %3 30.39 30.71 30.56 30.05 30.61 30.65 30.99 31.22 31.20 31.08 Diesel and kerosene usage for OCGTs, Mℓ 679.1 1 129.5 937.5 580.4 458.7 426.2 385.0 37.8 10.0 1 247.8 1. The calculation of KPIs include all units at Medupi as well as Kusile Units 1 to 4. Units are only included one year after achieving commercial operation, therefore Kusile Unit 5 is still excluded. Kusile Unit 4 has been included since 1 June 2023. 2. SAIDI and SAIFI are reported after allowing for exclusions defined in the National Regulated Standards adopted from 1 April 2018. 3. Only power stations where all units have achieved commercial operation are included in the calculation. Therefore, Kusile Power Station is excluded from this KPI. RA Reasonable assurance provided by the independent assurance provider for the respective year. Refer to pages 153 to 154 for the independent sustainability assurance report relating to FY2025. 141 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Technical statistics continued Measure and unit 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Environmental statistics Emissions Relative particulate emissions, kg/MWh sent out1, 4, 5 0.64RA 0.79RA 0.70 RA 0.34RA 0.38Q 0.47RA 0.47RA 0.27RA 0.30 RA 0.36RA Carbon dioxide (CO2), Mt4 204.6RA 190.4RA 187.5RA 207.2RA 206.8 RA 213.2RA 220.9RA 205.5RA 211.1RA 215.6RA Carbon dioxide equivalent (CO2e), Mt4 205.1 190.9 187.9 207.7 207.3 214.0 221.7 – – – Sulphur dioxide (SO2), kt4 1 591 1 431 1 449 1 671 1 604 1 721 1 853 1 802 1 766 1 699 Nitrous oxide (N2O), t4 1 470 1 382 1 438 1 561 1 527 2 826 2 844 2 642 2 782 2 757 Nitrogen oxide (NO x) as NO2, kt6 772 735 743 822 804 851 890 859 885 893 Methane (CH4), t4 1 567 1 523 1 483 1 466 1 442 – – – – – Particulate emissions, kt 122.94 RA 145.30 RA 129.32 66.65 71.35 94.92 99.87 57.13 65.13 78.37 Water Specific water consumption, ℓ /kWh sent out1 1.40 RA 1.43RA 1.39RA 1.45RA 1.42RA 1.42RA 1.41RA 1.30 RA 1.42RA 1.44RA Net raw water consumption, Mℓ 268 638 260 680 256 430 283 610 270 736 286 553 292 344 276 335 307 269 314 685 Waste Ash produced, Mt 30.24 29.27 30.20 32.90 30.84 32.04 33.23 31.65 32.61 32.59 Ash sold, Mt 4.1 2.5 2.6 2.8 3.1 2.9 2.8 2.7 2.8 2.7 Ash recycled, % 13.4 9.0 12.0 11.0 10.1 9.1 8.4 8.6 8.5 8.3 Asbestos disposed, tons 19 825.6 143.6 171.1 39.5 22 475.8 59.8 464.1 144.9 383.0 274.5 Material containing polychlorinated biphenyls thermally destroyed, tons7 – 5.1 96.2 46.5 134.3 238.3 43.1 26.3 61.9 59.8 Nuclear Public individual radiation exposure due to effluents, mSv8 0.0010 0.0012 0.0022 0.0010 0.0014 0.0004 0.0026 0.0012 0.0005 0.0006 Low-level radioactive waste generated (steel drum), cubic metres 151.6 188.2 164.6 158.9 147.6 159.3 188.3 164.2 162.9 176.1 Low-level radioactive waste disposed of, cubic metres 296.6 415.1 348.3 98.1 117.0 98.3 99.0 118.8 108.0 213.1 Intermediate-level radioactive waste generated (concrete drum), cubic metres 29.6 43.2 18.3 34.2 31.2 22.3 20.8 20.8 11.4 33.4 Intermediate-level radioactive waste disposed of, cubic metres 136 168 192 88 18 38 0 0 0 0 Used nuclear fuel, number of elements discharged9 60 56 48 56 116 48 56 116 60 56 Used nuclear fuel, number of elements discharged, cumulative figure 2 845 2 785 2 729 2 681 2 625 2 509 2 461 2 405 2 289 2 229 Legal contraventions Environmental legal contraventions, number 65 68 105 65 81 59 24 30 29 20 Environmental legal contraventions reported as a result of significant failure of business 0 7 10 7 7 5 2 2 0 1 systems, number10 1. The calculation of KPIs include all units at Medupi as well as Kusile Units 1 to 4. Units are only included one year after achieving commercial operation, therefore Kusile Unit 5 is still excluded. Kusile Unit 4 has been included since 1 June 2023. 2. Only power stations where all units have achieved commercial operation are included in the calculation. Therefore, Kusile Power Station is excluded from this KPI. 3. SAIDI and SAIFI are reported after allowing for exclusions defined in the National Regulated Standards adopted from 1 April 2018. 4. Figures are calculated based on coal characteristics and power station design parameters using coal analysis and coal burnt tonnages. Figures include coal-fired and gas turbine power stations, as well as oil consumed during power station start-ups. For carbon dioxide emissions, it also includes the underground coal gasification pilot plant. 5. At power stations with unusually high particulate emission levels, such as Kendal Power Station, the monitors often exceed their maximum limits. In instances where these ranges are exceeded, particulate emissions will be reported at the maximum of the monitor range. From February 2019, it is possible that actual emissions exceeded reported emissions based on measurements. 6. NO x reported as NO2 is calculated using average station-specific emission factors (which are measured intermittently) and tonnages of coal burnt. 7. Material containing polychlorinated biphenyls was phased out in compliance with legislation by 31 December 2023. Consequently, after FY2024, there was no such material left to be destroyed. 8. The limit set by the National Nuclear Regulator is ≤ 0.25mSv. 9. The gross mass of a nuclear fuel element is approximately 670kg, with Uranium mass typically between 462kg and 464kg. 10. Specific cases of environmental legal contravention incidents that are considered to be of very high significance in terms of their impact on the environment and/or on Eskom are recorded as incidents as a result of a significant failure of business systems. RA Reasonable assurance provided by the independent assurance provider for the respective year. Refer to pages 153 to 154 for the independent sustainability assurance report relating to FY2025. Q Qualified by the independent assurance provider for the respective year. 142 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Non-technical statistics: Group Measure and unit 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Finance1 Electricity operating costs, R/MWh 1 276.20 1 377.09 1 201.71 981.94 895.05 791.04 712.87 622.41 651.98 617.02 EBITDA, R million 99 038 RA 43 410 34 565RA 52 954RA 32 608 RA 36 816RA 31 417 45 359 37 532 32 811 EBITDA margin, % 29.05 14.67RA 13.32 21.39 15.96 18.46 17.46 25.57 21.19 20.29 Current ratio 1.04 0.98 0.89 0.90 0.95 0.82 1.00 1.03 0.85 0.83 Cash interest cover, ratio 2.76RA 1.18 1.29RA 1.69RA 0.85RA 0.94RA 0.94 1.22 1.73 1.73 Debt service cover, ratio 1.11RA 0.46RA 0.58 RA 0.76RA 0.30 RA 0.52RA 0.47 0.87 1.37 1.14 Gross debt/EBITDA, ratio 4.90 11.58 RA 13.92 8.54 13.98 14.43 15.73 9.74 10.84 10.95 Debt/equity (including long-term provisions), ratio 1.45 1.99 1.88 1.81 2.03 2.44 3.17 2.58 2.11 1.65 Gearing, % 59 67 65 64 67 71 76 72 68 62 Free funds from operations, R million 106 073 53 975 43 847 63 795 42 972 41 120 29 047 40 022 47 571 39 443 Free funds from operations after net interest paid, R million 74 926 19 830 11 567 31 904 6 496 2 606 (5 940) 9 147 21 148 17 927 Free funds from operations as % of gross debt, % 21.85 10.74 9.12 14.11 9.42 7.74 5.88 9.06 11.69 10.98 Building skills Headcount (including fixed-term contractors) 42 030 40 625 39 601 40 421 42 749 44 772 46 665 48 628 47 658 47 978 Transformation Socio-economic contribution Corporate social investment committed spend, R million 146.2 RA 93.1 63.0 RA 75.1RA 67.4RA 123.8 RA 132.4 Q 192.0 225.3 103.6 Corporate social investment, number of beneficiaries 1 203 566 272 217RA 438 094 785 085 802 635 1 479 395 933 139 1 116 044 841 845 302 736 Procurement equity B-BBEE attributable expenditure, R billion 205.4 178.8 150.1 134.2 100.4 101.7 84.5 102.3 127.7 125.0 Black-owned expenditure, R billion 112.4 93.3 87.6 83.2 53.8 46.9 52.1 57.6 53.9 52.9 Black women-owned expenditure, R billion 25.6 19.9 14.9 16.4 19.0 15.6 18.8 20.9 19.4 30.8 Black youth-owned expenditure, R billion 11.4 10.9 8.8 9.5 5.4 4.1 3.5 3.9 2.0 1.4 Procurement from B-BBEE compliant suppliers, %2 93.21RA 74.35 72.80 75.89 64.51 65.97 58.66 80.25 98.25 81.65 Procurement from black-owned (BO) suppliers, % 51.02 38.82 42.48 47.08 34.60 30.38 36.17 45.20 41.49 33.61 Procurement from black women-owned (BWO) suppliers, % 11.60 8.29 7.21 9.26 12.24 10.10 13.07 16.41 14.92 19.30 Procurement from black youth-owned (BYO) suppliers, % 5.17 4.53 4.26 5.40 3.46 2.65 2.41 3.05 1.52 0.94 Procurement spend with qualifying small enterprises (QSE), % of TMPS 7.54 4.50 4.39 4.91 4.29 4.08 5.17 8.86 8.91 4.62 Procurement spend with exempted micro enterprises (EME), % of TMPS 7.03 4.65 5.86 7.88 8.07 9.77 14.01 10.21 11.24 5.89 Employment equity Disabilities, number of employees 1 308 1 201 1 171 1 188 1 252 1 348 1 416 1 441 1 396 1 311 Employment equity – disability, % 3.11 2.96 2.96 2.94 2.93 3.01 3.03 2.96 2.93 2.73 Racial equity in senior management, % black employees 81.32 78.89 76.92 76.67 73.72 71.00 69.80 68.31 65.80 61.06 Gender equity in senior management, % female employees 42.58 42.52 42.01 43.33 41.99 41.73 39.85 38.20 36.58 28.13 Racial equity in professionals and middle management, % black employees 86.88 85.11 83.59 81.68 80.10 78.04 76.22 75.27 73.50 71.68 Gender equity in professionals and middle management, % female employees 43.20 42.03 40.92 39.91 38.95 38.24 37.89 37.47 35.98 35.11 1. Financial ratios impacted by restatements in the annual financial statements have been restated where applicable. 2. This measure was renamed to “Preferential procurement” in the shareholder compact from FY2020. RA Reasonable assurance provided by the independent assurance provider for the respective year. Refer to pages 153 to 154 for the independent sustainability assurance report relating to FY2025. Q Qualified by the independent assurance provider for the respective year. 143 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Non-technical statistics: Company Measure and unit 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Finance1 Electricity revenue per kWh (including environmental levy), c/kWh 187.98 165.43 141.38 127.32 111.04 101.86 90.01 85.06 83.60 76.24 Electricity operating costs, R/MWh 1 473.58 1 384.77 1 207.29 992.80 906.36 803.01 729.26 634.69 662.98 628.00 EBITDA, R million 61 851 42 733 35 428 51 178 31 633 35 199 29 168 43 428 35 989 30 932 EBITDA margin, % 19.35 14.45 13.65 20.67 15.48 17.65 16.21 24.48 20.32 19.13 Current ratio 1.07 1.12 0.90 0.89 0.94 0.82 0.99 1.04 0.86 0.86 Cash interest cover, ratio 1.96 1.19 1.27 1.63 0.81 0.90 0.91 1.18 1.73 1.64 Debt service cover, ratio 0.78 0.46 0.56 0.71 0.29 0.49 0.46 0.84 1.37 1.09 Gross debt/EBITDA, ratio 8.15 11.77 13.69 8.87 14.48 15.22 17.08 10.26 11.39 11.71 Debt/equity (including long-term provisions), ratio 1.69 2.06 2.10 2.00 2.24 2.68 3.50 2.77 2.22 1.71 Gearing, % 63 67 68 67 69 73 78 73 69 63 Free funds from operations, R million 72 388 53 029 44 941 61 075 41 470 39 465 27 318 39 064 46 336 37 954 Free funds from operations after net interest paid, R million 41 923 18 495 12 466 29 053 4 864 818 (7 897) 8 017 19 776 16 260 Free funds from operations as % of gross debt, % 14.37 10.55 9.26 13.46 9.06 7.37 5.48 RA 8.77RA 11.30 RA 10.48 RA Building skills Headcount (including fixed-term contractors) 32 383 35 151 34 518 34 690 36 124 37 765 39 292RA 41 316RA 41 940 42 767 Training spend as % of gross employee benefit costs, % 4.26RA 4.19RA 3.57RA 2.70 RA 2.58 RA 3.67RA 3.85RA 5.21RA 4.89RA 4.45RA Learner intake – Artisans, number2 196 173RA 135RA 106RA 0 RA 91RA 0 1 815 2 155 1 955 Learner intake – Engineers, number2 362 184RA 144RA 58 RA 0 RA 16RA 10 1 241 1 480 895 Learner intake – Technicians, number2 214 184RA 105RA 51RA 0 RA 11RA 3 838 1 209 415 Total learner intake (including plant operators and sector-specific)2 952RA 806 474 335 0 118 21 726Q 3 048Q 1 370 Transformation Socio-economic contribution Total number of electrification connections, number3 83 031RA 114 800 RA 102 590 RA 97 947RA 106 669RA 163 613RA 191 585RA 215 519 207 436 158 312 Procurement equity Local content contracted (Eskom-wide), % 4 93.79 90.72 87.02 86.89 65.99Q 92.84 Q 91.51RA 87.16 73.37Q 75.22Q Local content contracted (new build), % 4 75.48 97.05 73.08 57.53 56.94 88.53 81.14RA 85.59 85.78Q 84.04RA B-BBEE attributable expenditure, R billion 411.6 181.9 152.3 131.4 98.8 97.1 80.3 97.0 137.3 132.0 Black-owned expenditure, R billion 103.0 90.9 83.6 78.6 50.1 43.7 48.8 53.5 50.4 51.0 Black women-owned expenditure, R billion 22.3 18.7 13.2 14.6 17.4 14.6 18.1 19.7 17.3 30.2 Black youth-owned expenditure, R billion 10.0 10.0 7.7 7.9 4.4 3.7 3.1 3.4 1.7 1.3 Procurement from B-BBEE compliant suppliers, % 5 110.72 75.55RA 73.44RA 73.35RA 62.34RA 61.57RA 54.41Q 74.24RA 100.75RA 83.08 RA Procurement from black-owned (BO) suppliers, % 27.71 37.76 40.29 43.85 31.62 27.70 33.08Q 40.93RA 36.98 RA 30.98 RA Procurement from black women-owned (BWO) suppliers, % 6.01 7.75 6.35 8.13 10.98 9.27 12.28Q 15.08 RA 12.67RA 17.72RA Procurement from black youth-owned (BYO) suppliers, % 2.68 4.15 3.70 4.43 2.76 2.32 2.10 Q 2.58 RA 1.25RA 0.82RA Procurement spend with suppliers owned by black persons with disabilities (BPwD), % of TMPS 0.24 0.09 0.18 0.14 0.15 0.12 0.15Q 0.11RA 0.02RA 0.01RA Procurement spend with qualifying small enterprises (QSE), % of TMPS 3.80 4.06 3.90 4.01 3.36 3.37 4.47Q 7.80 RA 7.67RA 4.03RA Procurement spend with exempted micro enterprises (EME), % of TMPS 3.49 4.20 4.73 6.24 6.83 9.12 13.32Q 9.32RA 10.15RA 4.81RA Employment equity Disabilities, number of employees 1 106 1 092 1 049 1 057 1 113 1 198 1 265 1 292 1 263 1 271 Employment equity – disability, % 3.42 3.11 3.04 3.05RA 3.08 RA 3.16RA 3.22RA 3.13RA 3.01RA 2.97RA Racial equity in senior management, % black employees 81.57 78.55 76.38 76.80 RA 73.67RA 70.72RA 69.44RA 67.97RA 65.77RA 60.90 RA Gender equity in senior management, % female employees 42.66 42.90 42.33 43.89RA 42.63RA 41.71RA 39.90 RA 38.25RA 36.69RA 28.07RA Racial equity in professionals and middle management, % black employees 86.17 85.10 83.60 81.71RA 80.18 RA 78.06RA 76.25RA 75.35RA 73.60 RA 71.98 RA Gender equity in professionals and middle management, % female employees 44.54 42.71 41.57 40.59RA 39.69RA 38.99RA 38.63RA 38.06RA 36.65RA 36.01RA 1. Financial ratios impacted by restatements in the annual financial statements have been 4. Local content is measured as procurement of locally manufactured/produced goods RA Reasonable assurance provided by the independent assurance provider for the restated where applicable. and services as a percentage of total contracts awarded for all procurement at Eskom respective year. Refer to pages 153 to 154 for the independent sustainability assurance 2. The reporting boundary for FY2025 includes NTCSA, to ensure comparability with the company level. The definition of local content which is reported in terms of the report relating to FY2025. prior year when the activities of the Transmission Division formed part of the Eskom shareholder compact in the directors’ report measures local content from designated Q Qualified by the independent assurance provider for the respective year. company. The definition of learners was changed from FY2018, to account for learners only sectors as a percentage of total contracts awarded for all Eskom company procurement. once at the time they sign up, and not continuously for the duration of their contract. 5. This measure was renamed to “Preferential procurement” in the shareholder compact 3. Electrification connections includes farmworker connections. from FY2020. 144 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Plant information POWER STATION CAPACITIES at 31 March 2025 The difference between installed and nominal capacity reflects auxiliary power consumption and reduced capacity caused by the age of the plant. Number and installed capacity Total installed Total nominal Years commissioned, of generator sets capacity capacity Name of station Location first to last unit MW MW MW Base-load stations Coal-fired (15) 45 340 39 177 Arnot Middelburg Sep 1971 to Aug 1975 6x370 2 220 2 100 3x200; 1x196; 2x195; Camden1, 3 Ermelo Mar 2005 to Jun 2008 1 561 1 481 1x190; 1x185 Duvha 2 Emalahleni Aug 1980 to Feb 1984 5x600 3 000 2 875 Grootvlei1, 3 Balfour Apr 2008 to Mar 2011 4x200; 2x190 1 180 570 3x200; 1x195; Hendrina3 Middelburg May 1970 to Dec 1976 1 666 1 041 1x191; 4x170 Kendal 4 Emalahleni Oct 1988 to Dec 1992 6x686 4 116 3 840 Komati1, 5 Middelburg Mar 2009 to Oct 2013 4x100; 4x125; 1x90 990 – Kriel Bethal May 1976 to Mar 1979 3x430; 3x500 2 790 2 640 Kusile 4 Ogies Aug 2017 to Jun 2024 5x799 3 995 3 600 Under construction 1x800 – – Lethabo Vereeniging Dec 1985 to Dec 1990 6x618 3 708 3 558 Majuba4 Volksrust Apr 1996 to Apr 2001 3x657; 3x713 4 110 3 807 Matimba4 Lephalale Dec 1987 to Oct 1991 6x665 3 990 3 690 Matla6 Bethal Sep 1979 to Jul 1983 6x600 3 600 3 450 Medupi4, 7 Lephalale Aug 2015 to Jul 2021 5x794; 1x790 4 760 3 600 Tutuka8 Standerton Jun 1985 to Jun 1990 6x609 3 654 2 925 Nuclear (1) Koeberg Cape Town Jul 1984 to Nov 1985 1x970; 1x964 1 934 1 854 Peaking stations Gas/liquid fuel turbine stations (4) 2 426 2 409 Acacia Cape Town May 1976 to Jul 1976 3x57 171 171 Ankerlig Atlantis Mar 2007 to Mar 2009 4x149.2; 5x148.3 1 338 1 327 Gourikwa Mossel Bay Jul 2007 to Nov 2008 5x149.2 746 740 Port Rex East London Sep 1976 to Oct 1976 3x57 171 171 Pumped storage schemes (3)9 2 732 2 724 Drakensberg Bergville Jun 1981 to Apr 1982 4x250 1 000 1 000 Ingula Ladysmith Jun 2016 to Feb 2017 4x333 1 332 1 324 Palmiet Grabouw Apr 1988 to May 1988 2x200 400 400 Hydroelectric stations (2)10 600 600 Gariep Norvalspont Sep 1971 to Mar 1976 4x90 360 360 Vanderkloof Petrusville Jan 1977 to Feb 1977 2x120 240 240 Total used for capacity management purposes 53 032 46 764 145 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Plant information continued Number and installed capacity Total installed Total nominal Years commissioned, of generator sets capacity capacity Name of station Location first to last unit MW MW MW Renewable energy Wind energy (1)11 Sere Vredendal Mar 2015 46x2.2 100 100 Total capacity including renewable energy 53 132 46 864 Other hydroelectric stations (4)11 61 2 Mbashe12 Mbashe River 3x14 42 – First Falls12 Umtata River 2x3 6 – Ncora Ncora River 2x0.4; 1x1.6 2 2 Second Falls12 Umtata River 2x5.5 11 – Total Eskom power station capacities (30) 53 193 46 866 Nominal capacity available to the grid – Eskom-owned 88.11% Nominal capacity of Eskom-owned power stations 46 866 Independent power producers (IPP) capacity 7 495 Biomass 25 Concentrating solar power 500 Fossil fuels (STPPP) 160 Gas/liquid fuel 1 005 Hydroelectric 18 Landfill 8 Renewable with battery storage (RMIPPPP) 150 Solar PV energy 2 287 Wind 3 342 Total nominal capacity available to the grid – Eskom and IPPs 54 361 1. Former moth-balled power stations that have been returned to service. The original commissioning dates were: • Camden was originally commissioned between August 1967 and September 1969 • Grootvlei was originally commissioned between June 1969 and November 1977 • Komati was originally commissioned between November 1961 and March 1966 Due to technical and/or financial constraints, some units at these stations have been derated. 2. The Duvha Unit 3 recovery project was cancelled and the unit was removed from the installed base in FY2018. 3. Certain units are under reserve storage and their capacity removed from the nominal base. 4. Dry-cooled unit specifications based on design back-pressure and ambient air temperature. 5. All of Komati’s units have been shut down, with the last unit shut down by 1 November 2022. The station is being repurposed as part of Eskom’s Just Energy Transition initiative. 6. Matla Unit 6 was placed in extended inoperability and removed from the nominal base for reporting purposes from 1 July 2025 until its expected return to service in September 2026. 7. Medupi Unit 4 was placed in extended inoperability and removed from the nominal base from 1 October 2022. It was once again included in the nominal base from 1 June 2025 and synchronised to the grid on 6 July 2025. 8. Tutuka Unit 6 was placed in extended inoperability and removed from the nominal base from 1 August 2024 until its expected return to service in October 2026. 9. Pumped storage facilities are net users of electricity. Water is pumped during off-peak periods so that hydroelectricity can be generated during peak periods. 10. Use restricted to periods of peak demand, dependent on the availability of water in the Gariep and Vanderkloof Dams. 11. Installed and operational, but not included when calculating technical performance KPIs. 12. Small hydro stations were placed in reserve storage from 1 April 2021. 146 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Plant information continued POWER LINES AND SUBSTATIONS IN SERVICE at 31 March 2025 Category 2025 2024 2023 2022 2021 Power lines Transmission power lines, km1 33 367 33 367 33 234 33 233 33 198 765kV 2 784 2 784 2 784 2 784 2 784 533kV DC (monopolar) 1 032 1 032 1 032 1 032 1 032 400kV 20 036 20 036 19 916 19 916 19 760 275kV 7 395 7 395 7 395 7 342 7 342 220kV 1 352 1 352 1 352 1 352 1 351 132kV 728 728 714 766 889 Below 132kV 40 40 40 40 40 Distribution overhead power lines, km 369 342 367 335 363 603 363 286 358 100 132kV and higher 27 855 27 474 27 378 27 265 26 441 44 to 88kV 22 414 22 535 22 219 22 359 21 367 33kV 4 110 4 061 3 879 3 851 3 730 1 to 22kV 314 963 313 264 310 127 309 811 306 561 Distribution underground cables, km 8 472 8 425 8 376 8 339 8 288 132kV and higher 71 70 70 97 97 44 to 88kV 205 205 205 215 209 33kV 330 330 330 323 323 1 to 22kV 7 866 7 820 7 771 7 704 7 659 Total all power lines, km 411 181 409 128 405 213 404 858 399 586 Total transformer capacity, MVA 308 610 307 675 306 541 306 279 314 750 Transmission, MVA 2 161 223 160 748 160 468 160 148 159 127 Distribution and reticulation, MVA 147 387 146 927 146 073 146 131 155 623 Total transformers, number 418 521 415 367 415 351 414 632 420 519 Transmission, number2 517 518 516 515 513 Distribution and reticulation, number 418 004 414 849 414 835 414 117 420 006 1. Transmission power line lengths are included based on distances from the Geographic Information System. 2. In the past, only transmission lines with a primary voltage ≥132kV and transmission transformers rated ≥30MVA were reported. In an effort to align internal and external reporting, transmission lines and transformers with a lower voltage or rating have been included from FY2025. Comparatives were restated accordingly. 147 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Customer information 1. Prepaid electricity and public lighting are included under the residential category. Category 2025 2024 2023 2022 2021 2. IPP network consumption is included under the industrial category. Number of Eskom customers 3. The short-term energy market consists of all the utilities in the southern African countries that form part of the Southern African Power Pool. Energy is traded on a Distributors 792 799 799 799 804 daily, weekly and monthly basis as there is no long-term bilateral contract. Residential1 6 997 657 7 046 042 6 944 488 6 833 928 6 720 150 4. From 1 April 2022, revenue from the sale of production, while testing generating Commercial 49 183 49 968 50 846 52 736 52 880 plant not yet commissioned, is no longer capitalised to the plant and instead Industrial 2 501 2 516 2 560 2 601 2 649 recognised as revenue in the income statement. The comparative for 2022 was Mining 889 894 906 926 945 restated accordingly. 5. The principle of only recognising revenue if it is deemed collectable at the date Agricultural 68 658 71 666 74 608 77 692 79 115 of sale, as opposed to recognising the revenue and then impairing the customer Rail 398 400 454 471 475 debt when conditions change, has been applied since 2015. External revenue of International 12 11 11 11 11 R23 797 million was thus not recognised at 31 March 2025. 6. Under IFRS 15 Revenue from Contracts with Customers, certain supplies to distributors 7 120 090 7 172 296 7 074 672 6 969 164 6 857 029 were recognised on the cash basis, due to uncertainty around collectability at the Electricity sales per customer category, GWh time of sale. Distributors 78 993 76 102 79 480 83 831 82 354 Residential1 8 776 8 559 9 177 10 520 10 949 Commercial 10 071 9 427 9 376 9 872 9 696 Industrial2 43 153 44 231 44 635 45 220 40 973 Mining 27 239 28 072 27 843 28 030 26 991 Agricultural 5 286 4 911 4 785 5 382 5 461 Rail 1 673 1 647 1 668 2 128 1 931 International 14 532 10 362 11 437 13 298 13 497 189 723 183 311 188 401 198 281 191 852 International sales to countries in southern Africa, GWh 14 532 10 362 11 437 13 298 13 497 Botswana 771 179 370 851 785 Eswatini 871 710 609 713 677 Lesotho 794 370 416 341 324 Mozambique 7 873 7 662 8 228 8 215 8 263 Namibia 1 079 423 622 1 653 1 493 Zambia 1 847 83 25 6 78 Zimbabwe 1 083 927 1 152 1 456 1 791 Short-term energy market 3 214 8 15 63 86 Electricity revenue per customer category, R million Distributors 145 299 124 302 111 414 105 369 90 228 Residential1 22 161 19 317 18 052 18 680 16 924 Commercial 24 869 20 900 17 622 16 723 14 304 Industrial2 63 509 61 367 53 269 48 204 37 026 Mining 52 761 47 923 39 958 36 630 30 708 Agricultural 16 291 13 858 11 660 11 600 10 262 Rail 4 333 3 835 3 374 3 477 2 977 International 21 611 11 457 10 699 11 450 10 383 Gross electricity revenue 350 834 302 959 266 048 252 133 212 812 Less: Revenue capitalised4 – – – – (3 991) Less: Revenue not recognised5 (23 797) (17 245) (15 774) (14 215) (12 112) Add: Recognised on the cash basis6 11 864 8 347 7 563 6 543 5 935 Electricity revenue less capitalised revenue per note 32 338 901 294 061 257 837 244 461 202 644 in the financial statements 148 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Environmental implications of using or saving electricity FACTOR 1 Figures are calculated based on total electricity sales by Eskom, which is based on the total available for distribution (including purchases), after excluding losses through transmission and distribution (technical losses), losses through theft (non-technical losses), our own internal use and wheeling. Thus to calculate CO2 emissions per MWh, divide the quantity of CO2 emitted by electricity sales: 204.6Mt of CO2 ÷ 189 723GWh sales = 1.08 tons per MWh FACTOR 2 Figures are calculated based on total electricity generated by Eskom, which includes coal, nuclear, pumped storage, wind, hydro and gas turbines, but excludes the total consumed by Eskom. Thus, divide the quantity of CO2 emissions by (electricity generated less Eskom’s electricity consumption for pumped storage stations): 204.6Mt of CO2 ÷ (195 702GWh generated less 6 064GWh own consumption for pumping) = 1.08 tons per MWh Figures represent the 12-month period from 1 April 2024 to 31 March 2025. Factor 1 Factor 2 If electricity consumption is measured in: (total energy (total energy sold) generated) kWh MWh GWh TWh Coal use 0.56 0.56 kilogram ton thousand tons (kt) million tons (Mt) Water use1 1.42 1.42 litre kilolitre megalitre (Mℓ) thousand megalitres Ash produced 159 159 gram kilogram ton thousand tons (kt) Particulate emissions 0.65 0.65 gram kilogram ton thousand tons (kt) CO2 emissions2, 3 1.08 1.08 kilogram ton thousand tons (kt) million tons (Mt) SO x emissions2 8.38 8.39 gram kilogram ton thousand tons (kt) NO x emissions4 4.07 4.07 gram kilogram ton thousand tons (kt) 1. Volume of water used at all Eskom power stations. 2. Calculated figures based on coal characteristics and power station design parameters. Sulphur dioxide and carbon dioxide emissions are based on coal analysis and using coal burnt tonnages. Figures include coal-fired and gas turbine power stations, as well as oil consumed during power station start-ups and, for carbon dioxide emissions, the underground coal gasification pilot plant. 3. This calculated figure should not be considered an official grid emission factor. While Eskom has taken reasonable care in collecting and analysing data, Eskom is not responsible for any loss that may result from the use of this information. Before making any business decisions, interested parties are advised to refer to grid emission factors published by DFFE. 4. NO x reported as NO2 is calculated using average station-specific emission factors, which have been measured intermittently, and tonnages of coal burnt. . Multiply electricity consumption or saving by the relevant factor in the table above to determine the environmental implication. Example 1: Water consumption Example 2: CO2 emissions Using Factor 1 Using Factor 1 Used 90MWh of electricity Used 90MWh of electricity 90 x 1.42 = 127.8 90 x 1.08 = 97.2 Therefore 127.8 kilolitres of water used Therefore 97.2 tons CO2 emitted Using Factor 2 Using Factor 2 Used 90MWh of electricity Used 90MWh of electricity 90 x 1.42 = 127.8 90 x 1.08 = 97.2 Therefore 127.8 kilolitres of water used Therefore 97.2 tons CO2 emitted 149 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Sustainability indicators selected for reasonable assurance Deloitte & Touche has been engaged to provide reasonable assurance on selected sustainability key performance indicators (KPIs) for the year ended 31 March 2025. These KPIs are reported based on internally developed measure specification documents which set out the reporting criteria. These criteria are summarised in the measurement description for each KPI in the table below. All but one of the 35 KPIs scoped for reasonable assurance received an unqualified opinion. IR Refer to the independent sustainability assurance report from page 153 for further information The selected KPIs and corresponding performance for the year ended 31 March 2025 are as follows: Unit of Actual Key performance indicator measure Measurement description Boundary 2025 Safety Lost-time injury rate (employees only)SC Rate Proportional representation of lost-time injuries over 12 months per 200 000 working hours. The measure includes Group 0.23RA occupational diseases but excludes third party at fault incidents and all passengers in commuting incidents Generation Energy availability factor (EAF)SC % Measures power station availability of official generating units based on nominal capacity. It considers planned and Generation 60.60 RA unplanned energy losses under the control of plant management, as well as other non-controllable losses Planned capability loss factor (PCLF)SC % Energy losses due to planned maintenance on power station units, whether due to full shutdowns or partial load reduction Generation 12.76RA Unplanned capability loss factor (UCLF) % Unplanned losses, whether due to full breakdowns or partial unavailability of plant Generation 26.05RA Other capability loss factor (OCLF) % Energy losses outside of a station’s control as well as internal non-engineering constraints Generation 0.59RA Post-philosophy outage unplanned capability loss factor % Unplanned breakdowns of power station units that occur within sixty days after the unit has returned from a planned Generation 29.69RA (PPO UCLF) philosophy outage Particulate emissions kt The mass of particulates emitted from Eskom’s coal-fired power stations Generation 122.94RA Relative particulate emissions SC kg/MWh The mass of particulates emitted from Eskom’s coal-fired power stations per unit of energy sent out Generation 0.64 RA sent out Atmospheric emission licence (AEL) complianceSC % Annual average of AEL compliance per coal-fired power station, scored on an internal assessment of each station’s Generation 85.62RA compliance with the required AEL conditions. It includes emission limit compliance, number of NEMA section 30 incidents, emission monitor status and gaseous monitor reliability, among others Carbon dioxide emissions (from fossil fuel generation) MtCO2 Tonnage of CO2 emitted through fossil fuel generation Generation 204.6RA Specific water consumption SC ℓ /kWh The amount of raw water used for power generation per unit of energy sent out Generation 1.40 RA sent out Coal purchase Rand/ton increaseSC % Determined by comparing the current average fleet purchase price of coal against the previous year’s actual price Generation 2.9RA Generation capacity installed and commissioned MW New power station units installed and commissioned on Eskom’s network Generation 799RA (commercial operation)SC Note 1 NTCSA System minutes lost <1SC Minutes Measures the sum of system minutes lost for interruptions on the transmission network. It excludes major incidents with a NTCSA 4.37RA severity of one minute or more Number of interruptions Number The number of interruptions on the transmission network NTCSA 43RA Major incidents ≥1 minute Number An interruption on the transmission network with a severity ≥1 system minute NTCSA 4RA Transmission lines installed SC km New high-voltage transmission lines installed on the transmission network NTCSA 292.6RA Transmission transformer capacity installed and commissionedSC MVA New transformer capacity installed and commissioned at transmission substations NTCSA 2 620 RA 150 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Sustainability indicators selected for reasonable assurance continued Unit of Actual Key performance indicator measure Measurement description Boundary 2025 Distribution System average interruption duration index (SAIDI)SC Hours The average duration of interruptions on the distribution network experienced by customers during a year Distribution 34.91RA Distribution total energy lossesSC % Losses incurred on the distribution network in the process of receiving energy from the transmission network and supplying Distribution 10.42RA energy to Eskom’s end customers. Losses may arise from technical and non-technical reasons. The latter includes losses due to electricity theft through illegal connections, tampering and bypassing of electricity meters, as well as the purchase of electricity tokens from unregistered or illegal vendors. Meter reading and billing errors are included Payment levelsSC % Total payments received on amounts invoiced to customers for electricity consumption, including interest Distribution 93.86RA Total electrification connections Number New connections of households and farm dweller houses in Eskom’s licensed areas of supply, funded from Government’s Distribution 83 031RA electrification programme or directly by Eskom Finance EBITDA SC R million Earnings before interest, tax, depreciation and amortisation Group 99 038 RA Cash interest cover ratioSC Ratio Operating cash flows available to service net interest on borrowings Group 2.76RA Debt service cover ratioSC Ratio Operating cash flows available to service net interest and capital repayments on borrowings Group 1.11RA Savings from turnaround initiatives SC R billion Capital, operational or working capital savings arising from cost avoidance and optimisation initiatives, as well as other Group 16.3Q income initiatives, achieved through Eskom’s savings programme. Measured as the improvement against an initial baseline Note 2 Human resources New learner enrolment SC, 1 Number Total number of new learners, including artisans, engineers, technicians and sector-specific learners Eskom company 952RA & NTCSA 2 Training expenditure as % of actual gross employee benefit expenseSC % Training and development cost as a percentage of actual gross employee benefit expense Eskom company 4.26RA Procurement Preferential procurement SC % Procurement of goods and services from B-BBEE compliant suppliers. Calculated as a percentage of total measurable Group 93.21RA procurement spend Local content SC % Procurement of locally manufactured and/or produced goods and services from designated sectors as a percentage of total Eskom company 85.83RA contracts awarded at Eskom company level Enterprise development SC R million Value of enterprise development initiatives provided to new and existing black-owned enterprises Eskom company 6.98 RA & NTCSA 2 Supplier development SC R billion Value of initiatives undertaken and contracts awarded or subcontracted to qualifying enterprises Eskom company 12.29RA & NTCSA 2 Corporate social investment (CSI) CSI committed spendSC R million Total amount committed or paid towards corporate social investment Group 146.20 RA Just Energy Transition (JET) Assembly of containerised microgrids at KomatiSC Number The number of containerised microgrids assembled at the facility at Komati Group 13RA Note 3 Construction of the climate-smart horticulture facility at GrootvleiSC % Completion of construction of a climate-smart horticulture facility at Grootvlei Group 80 RA Note 4 1. This KPI is an aggregation of the learner intake figures reported in the prior year. 2. The reporting boundary includes NTCSA, to ensure comparability with the prior year when the activities of the Transmission Division formed part of the Eskom company. SC Indicates that a KPI was included in the shareholder compact for FY2025. RA Reasonable assurance provided by the independent assurance provider. Q Qualified by the independent assurance provider. Refer to the independent sustainability assurance report from page 153 for further information. 151 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Sustainability indicators selected for reasonable assurance continued Note 1: Generation capacity installed and resume. GAH repairs were completed at the end of Note 2: Savings from turnaround initiatives Note 3: Assembly of containerised microgrids at commissioned August 2023. First synchronisation of the unit to the Deloitte has qualified this KPI. The reported Komati On 17 September 2022, the gas air heater (GAH) grid was successfully achieved on 31 December 2023. results are deemed to be overstated due to factual Construction of 13 containerised microgrid units, on Kusile Unit 5 caught fire while executing the third Despite the significant schedule delays due to the GAH differences associated with ten initiatives amounting which commenced in FY2024, was concluded in boiler steam blows, being the last milestone activity fire incident, the shareholder advised Eskom not to to R2.9 billion as well as their disagreement with the May 2024 against a target of 30 units, due to limited prior to first synchronisation. As a result, all unit submit a second addendum to the shareholder compact estimates and judgements applied by management orders and delays in securing planned funding commissioning activities were discontinued. At that for FY2024. Instead, the measure and target were rolled to establish approved baselines for seven initiatives from DEE. Although internal funding was secured time, eight key commissioning milestone activities had over to the shareholder compact for FY2025. amounting to R3.4 billion. For a further R1.4 billion in February 2025 to manufacture additional units, been successfully achieved. A technical investigation savings associated with Generation site-based there was insufficient time to complete the assembly was conducted, and the investigation report was Commercial operation of Kusile Unit 5 was contracts, Deloitte was unable to obtain sufficient and fabrication of the remaining units by year end. finalised in February 2023. successfully achieved on 30 June 2024, connecting and appropriate audit evidence to support the No containers were in fabrication at year end. 799MW to the grid. Despite the final rated capacity reported results. The GAH fire incident significantly impacted the of the unit being 1MW lower than planned, the unit The strategy has been revised and we have engaged unit commissioning schedule as the GAH had to be is considered to have been delivered in line with the with stakeholders to secure commitments for the fully repaired before commissioning activities, which  efer to the qualification contained in the IR R offtake of an additional 43 units during FY2026. shareholder compact expectation. independent sustainability assurance opinion on included plant optimisation and capability tests, could page 154 for further information Note 4: Construction of the climate-smart horticulture facility at Grootvlei Significant development work was concluded during the year, including identifying and ring-fencing land, finalising funding and partnership arrangements, obtaining environmental approvals, concluding designs and appointing contractors for civil work and fencing. Construction of the facility commenced in November 2024, although construction was halted in early December 2024 to facilitate further engagement with business forums as well as local and provincial government. Work recommenced in January 2025, but heavy rains made construction impossible. The site remained waterlogged and inaccessible until year end. Nevertheless, expenditure was incurred during the year on fencing, the greenhouse and transformer. Construction is scheduled for completion in FY2026, with the facility expected to become operational by 31 March 2026, complemented with the necessary training. 152 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Independent sustainability assurance report by Deloitte & Touche INDEPENDENT ASSURANCE PRACTITIONER’S REASONABLE ASSURANCE REPORT Key performance indicator and unit of measure Boundary ON SELECTED KEY PERFORMANCE INDICATORS TO THE DIRECTORS OF Distribution ESKOM HOLDINGS SOC LTD We have undertaken a reasonable assurance engagement on selected key performance indicators (KPIs), as System average interruption duration index (SAIDI), hours Distribution described below, and presented in the integrated report of Eskom Holdings SOC Ltd (Eskom) for the year ended Distribution total energy losses, % Distribution 31 March 2025. This engagement was conducted by a multidisciplinary team including environmental, safety, social and assurance specialists with relevant experience in sustainability reporting. Payment levels, % Distribution Total electrification connections, number Distribution SUBJECT MATTER We have been engaged to provide a reasonable assurance opinion in our report on the following selected KPIs, Finance marked with RA in the integrated report. The selected KPIs described below have been prepared in accordance EBITDA, R million Group with Eskom’s internal reporting guidelines (reporting criteria) and the associated reporting boundary, which are Cash interest cover ratio Group set out on pages 150 to 151. Debt service cover ratio Group Key performance indicator and unit of measure Boundary Savings from turnaround initiatives, R billion Group Safety Human resources Lost-time injury rate (employees only), rate Group New learner enrolment, number2 Eskom company & NTCSA Generation Training expenditure as % of actual gross employee benefit expense, % Eskom company Energy availability factor (EAF), % Generation Procurement Planned capability loss factor (PCLF), % Generation Preferential procurement, % Group Unplanned capability loss factor (UCLF), % Generation Local content, % Eskom company Other capability loss factor (OCLF), % Generation Enterprise development, R million Eskom company & NTCSA Post-philosophy outage unplanned capability loss factor (PPO UCLF), % Generation Supplier development, R billion Eskom company & NTCSA Particulate emissions, kt Generation Corporate social investment (CSI) Relative particulate emissions, kg/MWh sent out Generation CSI committed spend, R million Group Atmospheric emissions licences (AEL) compliance, % Generation Just Energy Transition (JET) Carbon dioxide emissions (from fossil fuel generation), MtCO2 Generation Assembly of containerised microgrids at Komati, number1 Group Specific water consumption, ℓ /kWh sent out Generation Construction of the climate-smart horticulture facility at Grootvlei, %1 Group Coal purchase Rand/ton % increase, % Generation 1. We were not required to provide assurance on these KPIs in the prior year. Generation capacity installed and commissioned (commercial operation), MW Generation 2. This KPI is an aggregation of the learner intake figures which were assured separately in the prior year. NTCSA System minutes lost <1, minutes NTCSA Number of interruptions, number1 NTCSA Major incidents ≥1 minute, number1 NTCSA Transmission lines installed, km NTCSA Transmission transformer capacity installed and commissioned, MVA NTCSA 153 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Independent sustainability assurance report by Deloitte & Touche continued DIRECTORS’ RESPONSIBILITY Standard on Assurance Engagements (ISAE) 3000 2. Savings of R3.4 billion, related to seven RESTRICTION OF LIABILITY The directors are responsible for the selection, (Revised), Assurance Engagements Other than Audits specific initiatives, which are overstated due Our work has been undertaken to enable us to preparation and presentation of the selected or Reviews of Historical Financial Information, issued by to a disagreement in respect of inappropriate express a reasonable assurance opinion on the KPIs in accordance with reporting criteria. This the International Auditing and Assurance Standards estimates and judgements applied by selected KPIs to the directors of Eskom in accordance responsibility includes the identification of Board. This standard requires that we plan and management in establishing the approved with the terms of our engagement, and for no other stakeholders and stakeholder requirements, material perform our engagement to obtain reasonable baselines purpose. We do not accept or assume liability to any issues, commitments with respect to sustainability assurance about whether the selected KPIs are free 3. Savings of R1.4 billion associated with the “Contract party other than Eskom, for our work, for this report, performance and design, implementation and from material misstatement. Negotiations, Once-Off Purchase Orders and or for the conclusion we have reached. maintenance of internal controls relevant to the Standard Rates contracts” initiative, specific to preparation of the integrated report that is free from A reasonable assurance engagement undertaken REPORT ON OTHER LEGAL AND Generation site-based contracts, for which we were material misstatement, whether due to fraud or error. in accordance with ISAE 3000 (Revised) involves REGULATORY REQUIREMENTS unable to obtain sufficient and appropriate audit The directors are also responsible for determining the performing procedures to obtain evidence about In accordance with our responsibilities in terms of evidence to the actual savings reported and were appropriateness of the measurement and reporting the measurement of the selected KPIs and related sections 44(2) and 44(3) of the Auditing Profession unable to do so by alternative means criteria in view of the intended users of the selected disclosures in the integrated report. The nature, Act, 2005, we report that we have identified a KPIs and for ensuring that those criteria are publicly timing and extent of procedures selected depend on Consequently, the “Savings from turnaround reportable irregularity in terms of the Auditing available to users. the auditor’s professional judgement, including the initiatives” reported is overstated by R6.3 billion. We Profession Act. We have reported this matter to assessment of the risks of material misstatement of were unable to determine whether any additional IRBA. The matter pertaining to the reportable OUR INDEPENDENCE AND QUALITY the selected KPIs, whether due to fraud or error. adjustment would be required to the savings related irregularity has been described in item 1 of note 52 MANAGEMENT to the “Contract Negotiations, Once-Off Purchase of Eskom’s annual financial statements for the year In making those risk assessments we have considered We have complied with the independence and other Orders and Standard Rates contracts” initiative of ended 31 March 2025. internal controls relevant to Eskom’s preparation ethical requirements of the Code of Professional R1.4 billion and therefore increase the R6.3 billion of the selected KPIs. A reasonable assurance Conduct for Registered Auditors issued by the overstatement of the “Savings from turnaround engagement also includes: Independent Regulatory Board for Auditors (IRBA initiatives” KPI reported. Code), which is founded on fundamental principles • Evaluating the appropriateness of quantification of integrity, objectivity, professional competence and methods, reporting policies and internal guidelines QUALIFIED REASONABLE ASSURANCE due care, confidentiality and professional behaviour. used and the reasonableness of estimates made by OPINION The IRBA Code is consistent with the corresponding Eskom In our opinion, except for the possible effects of the sections of the International Ethics Standards • Assessing the suitability in the circumstances of matter referred to in the “Basis for qualified opinion” Deloitte & Touche Board for Accountants’ International Code of Ethics Eskom’s use of the applicable reporting criteria as a paragraph above, the selected KPIs as set out in the Registered Auditors for Professional Accountants (including International basis for preparing the selected information “Subject matter” paragraph above for the year ended 31 March 2025 are prepared, in all material respects, Per Jyoti Vallabh Independence Standards). • Evaluating the overall presentation of the selected in accordance with the reporting criteria. Chartered Accountant (SA) sustainability performance information Deloitte & Touche applies the International Standard Registered Auditor on Quality Management 1, which requires the We believe that the evidence we have obtained is OTHER MATTERS Partner firm to design, implement and operate a system of sufficient and appropriate to provide a basis for our Our report includes the provision of reasonable quality management, including policies or procedures 29 September 2025 qualified opinion. assurance on selected KPIs, as indicated in the regarding compliance with ethical requirements, “Subject matter” paragraph above, on which we were 5 Magwa Crescent professional standards and applicable legal and BASIS FOR QUALIFIED OPINION previously not required to provide assurance. Waterfall City, Waterfall regulatory requirements. Included in the “Savings from turnaround initiatives” Private Bag X6, Gallo Manor, 2052 reported of R16.3 billion are: The maintenance and integrity of Eskom’s website South Africa ASSURANCE PRACTITIONER’S is the responsibility of Eskom’s management. Our 1. Savings of R2.9 billion, related to ten specific RESPONSIBILITY procedures did not involve consideration of these initiatives, which are overstated based on the Our responsibility is to express a reasonable matters and, accordingly, we accept no responsibility supporting evidence provided in respect of the assurance opinion on the selected KPIs based on the for any changes to either the information in the actual results used to determine the savings procedures we have performed and the evidence integrated report or our independent reasonable we have obtained. We conducted our assurance assurance report that may have occurred since the engagement in accordance with the International initial date of its presentation on Eskom’s website. 154 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Disclosure of information under the PFMA Section 55(2)(b)(i) of the Public Finance Management in terms of the PFMA relating to irregular expenditure From an improvement perspective, it is imperative BREACH OF MORE THAN ONE LEGISLATIVE Act, 1999 (PFMA) requires that the particulars of and losses due to criminal conduct, as the associated to align Eskom’s PFMA procedures and processes REQUIREMENT any irregular expenditure, any fruitless and wasteful financial records were not complete or accurately with changing regulations and best practice. Eskom’s In certain instances, transgression of more than one expenditure as well as material losses due to criminal maintained in line with legislative requirements. revised process instruction on the treatment of legislative requirement was identified. conduct be disclosed in an entity’s annual financial The auditors have raised material findings in respect irregular expenditure has been implemented, statements and annual report. The National Treasury of the lack of completeness and accuracy of Eskom’s together with awareness sessions. The revised TENDER PROCESSES NOT ADHERED TO Instruction 4 of 2022/23 on PFMA Compliance and reported PFMA information, both relating to the process instruction on the treatment of fruitless AND INSUFFICIENT DELEGATION OF Reporting Framework, effective from 3 January current year and the cumulative balances. and wasteful expenditure is at an advanced stage AUTHORITY 2023, was applied in this regard when compiling the of implementation. PFMA awareness and training Irregular expenditure was incurred where incorrect disclosure in Eskom’s annual financial statements AFS Refer to the “Report on the audit of the will continue to be rolled out and is mandatory for tender processes were followed in a manner that was and integrated report. The instruction applies to consolidated and separate financial statements all employees to enhance understanding of their not deemed fair, equitable, transparent, competitive all departments, trading entities, constitutional – Basis for qualified opinion” and “Other responsibilities as well as the importance of PFMA and cost-effective and/or transactions were executed institutions and public entities listed in Schedules 2 information” in the independent auditor’s report in compliance, while also communicating key changes in without the appropriate approvals. and 3 to the PFMA. the financial statements for further information the process. A dedicated communication channel has been created to enhance communication on PFMA- MODIFICATIONS EXCEEDING ALLOWED The instruction note requires reporting of irregular related matters throughout the group. AMOUNTS expenditure and fruitless and wasteful expenditure Eskom continues to actively seek ways to enhance National Treasury required that their approval be inclusive of value-added tax (VAT). However, PFMA compliance through a proactive and Eskom will continue to seek ways to enhance and obtained for any modification made to an original National Treasury has granted Eskom a departure effective response to address PFMA-related audit strengthen internal controls to improve PFMA contract from 1 May 2016 to 1 April 2022 where from this requirement in terms of section 79 of the qualifications. This requires a multi-year approach compliance. These measures are aimed at fostering a the value of the modification was more than 20% of PFMA. Eskom has historically reported all amounts due to the impact of the PFMA on the entire culture of transparency and accountability within Eskom the contract or purchase order value or R20 million excluding VAT and has continued to do so for group. An audit recovery programme was initiated while ensuring that individuals responsible for PFMA for construction-related goods, works or services, FY2025; therefore, all amounts disclosed in this note in February 2025 with a core focus on enhancing non-compliance are held accountable for their actions. and 15% of the contract or purchase order value exclude VAT. governance in supply chain management (SCM), or R15 million for all other goods or services. The to proactively identify any non-compliance with the group did not initially comply with this requirement In addition to the annual disclosure provided in the AFS Refer to note 51 in the annual financial statements PFMA process. The audit recovery programme is predominantly due to a misinterpretation of the financial statements and integrated report, the group for further information designed to strengthen internal controls, address instruction note. The requirement to obtain National reports quarterly to National Treasury on current non-compliance with PFMA requirements, enhance Treasury approval for these transactions has since and historical irregular expenditure and fruitless audit readiness and enable Eskom to achieve IRREGULAR EXPENDITURE been repealed through the PFMA SCM National and wasteful expenditure that has not been fully unqualified audit opinions in the longer term. Irregular expenditure is defined as expenditure, Treasury Instruction Note 3 of 2021/2022, effective addressed, as required. other than unauthorised expenditure, incurred from 1 April 2022. The group’s PFMA compliance status is assessed on in contravention of or not in accordance with a Eskom received a qualified audit opinion from the a regular basis in accordance with the compliance requirement of any applicable legislation. The scope external auditors for FY2024 related to the disclosure risk monitoring plan. We have identified gaps and  efer to page 161 for a summary of expansions and IR R includes transgressions of any laws or regulations of irregular expenditure, fruitless and wasteful areas where PFMA compliance remains a challenge variations during the past year regardless of whether the expenditure was justified expenditure and losses due to criminal conduct and will continue to analyse the root causes of non- from a business perspective, value was received, in the annual financial statements. Furthermore, compliance to address them effectively. A detailed the breaches were deliberate or accidental, or the TAX NON-COMPLIANCE the prior year auditor’s report highlighted material action plan to address the audit qualification is breaches happened unknowingly or in good faith. The Preferential Procurement Policy Framework Act, findings in Eskom’s compliance with specific matters being executed with clear objectives, timelines 2000 (PPPFA) regulations stipulate that suppliers and key legislation, as well as significant internal and responsible areas, the progress of which is Irregular expenditure is deemed to be incurred must be compliant with SARS regulations. control deficiencies. Eskom has once again received monitored regularly. when the related transaction is recognised in a qualified opinion for FY2025, relating to the Eskom's financial records in terms of International quantification and disclosure of information required Financial Reporting Standards (IFRS). The irregular expenditure is deducted from the cumulative balance through a process of condonation by the relevant authority, removal of matters not condoned, recovery of losses or write-off of irrecoverable losses. Irregular expenditure is reported in the following categories: 155 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Disclosure of information under the PFMA continued USE OF SOLE SOURCE Irregular expenditure for the year ended 31 March 2025 Expenditure was incurred on contract awards which did not meet the National Treasury requirements for limited bidding, where contracts were incorrectly awarded Not to predetermined suppliers. Sole source requests are now scrutinised to confirm Opening condoned Recovered balance Total and or written Closing compliance with criteria before approval through the relevant governance processes. Description, R million restated Confirmed incurred Condoned removed off balance The requirement to obtain National Treasury approval for these transactions has Breach of more than one legislative since been repealed through the PFMA SCM National Treasury Instruction Note 3 54 062 561 54 623 (40) (1) – 54 582 requirement of 2021/2022. Tender processes not adhered to and 23 849 708 24 557 (288) (71) (43) 24 155 insufficient delegation of authority IR Refer to page 162 for a summary of deviations from normal procurement practices Modifications exceeding allowed amounts 8 621 2 8 623 (16) – – 8 607 during the past year Tax non-compliance 9 274 183 9 457 (1) – – 9 456 Use of sole source 3 821 1 3 822 (39) – – 3 783 Contracts awarded without following CONTRACTS AWARDED WITHOUT FOLLOWING CONSTRUCTION 935 – 935 – (305) – 630 CIDB requirements INDUSTRY DEVELOPMENT BOARD (CIDB) REQUIREMENTS PPPFA: Incorrect tender process applied 881 – 881 – – – 881 The group did not always comply with CIDB regulations regarding the advertising of Incorrect classification as emergency tenders, grading of contractors and publishing of awards. 630 – 630 (1) (3) – 626 or urgent procurement PPPFA: INCORRECT TENDER PROCESS APPLIED Expenditure not in accordance with 609 – 609 – – – 609 The PPPFA requires that the preferential points calculation is determined inclusive of other National Treasury instructions VAT. Certain procurement was performed incorrectly where the preferential points Designated sectors 381 7 388 (60) – – 328 calculation was determined exclusive of VAT. Other 169 75 244 – (2) – 242 Total 103 232 1 537 104 769 (445) (382) (43) 103 899 INCORRECT CLASSIFICATION AS EMERGENCY OR URGENT PROCUREMENT Note 1 Note 3 Note 3 Note 3 Irregular expenditure was incurred where emergency purchases did not meet the National Treasury requirements for emergency or urgent procurement. The requirement to obtain National Treasury approval for these transactions has since been repealed through the PFMA SCM National Treasury Instruction Note 3 of 2021/2022. IR Refer to page 162 for a summary of deviations from normal procurement practices during the past year EXPENDITURE NOT IN ACCORDANCE WITH OTHER NATIONAL TREASURY INSTRUCTIONS Non-compliance with National Treasury Instructions, unrelated to SCM instructions, which are reflected in other disclosure categories. DESIGNATED SECTORS Where local production and content is of critical importance in the award of tenders in designated sectors, such tenders must be advertised with a specific tendering condition that only locally produced goods, services or works or locally manufactured goods that meet the stipulated minimum threshold for local production and content will be considered. Contracts were awarded to suppliers despite them having declared a local content threshold that was below the required stipulated threshold as per the Department of Trade, Industry and Competition’s list of designated materials. 156 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Disclosure of information under the PFMA continued Irregular expenditure for the year ended 31 March 2024 1. Current year expenditure Confirmed Condoned, Description, R million Note 2025 2024 Prior and Prior Restated removed Expenditure confirmed in the Opening period As disclosed period 2024 Total and Closing (a) 1 537 4 738 current year Description, R million balance errors restated 2024 errors expenditure incurred recovered balance Prior period errors for 2024 expenditure Note 2 888 Breach of more than one 49 579 1 526 51 105 3 272 295 3 567 54 672 (610) 54 062 Total current year expenditure 1 537 5 626 legislative requirement Tender processes not adhered to and insufficient 22 787 396 23 183 1 130 364 1 494 24 677 (828) 23 849 (a) Expenditure for the current year delegation of authority Expenditure of R479 million incurred in FY2025 relates to new Modifications exceeding matters. The remaining amount incurred in FY2025 relates to 8 604 – 8 604 17 – 17 8 621 – 8 621 existing multi-year contracts that will continue to attract irregular allowed amounts Tax non-compliance 5 724 3 235 8 959 239 200 439 9 398 (124) 9 274 expenditure until condoned. Use of sole source 5 030 (1 211) 3 819 12 (10) 2 3 821 – 3 821 The group reported 49 incidents where irregular expenditure was Contracts awarded incurred in FY2025, 16 of which related to non-compliances that without following CIDB 1 240 (320) 920 15 – 15 935 – 935 occurred in FY2025 and 33 relating to continuing spend on multi-year requirements PPPFA: Incorrect tender contracts where the transgression took place in previous years. 882 (1) 881 – – – 881 – 881 process applied 2. Prior period errors Incorrect classification as emergency or urgent 647 – 647 – – – 647 (17) 630 2024 2024 procurement Description, R million expenditure opening balance Expenditure not in accordance with other Total prior period errors 888 3 668 609 – 609 – – – 609 – 609 National Treasury instructions There were restatements to the FY2025 opening balance on Designated sectors 428 15 443 – 18 18 461 (80) 381 202 matters, the net effect of which is an increase of R4 556 million, Other 67 28 95 53 21 74 169 – 169 comprising restatements to FY2024 expenditure of R888 million and R3 668 million to the FY2024 opening balance. In addition to Total 95 597 3 668 99 265 4 738 888 5 626 104 891 (1 659) 103 232 corrections to amounts previously disclosed, irregular expenditure Note 2 Note 1 Note 2 Note 1 Note 3 that relates to years prior to FY2025 which was concluded and quantified in the current year are disclosed as prior period errors in compliance with National Treasury Instruction Note 4 of 2022/23. There was a recategorisation from the “use of sole source” category to the “breach of more than one legislative requirement” category on non-compliant contracts that were incorrectly categorised in prior years by Eskom Rotek Industries. Although the net effect is zero, the impact on each category is R12 million incurred in FY2024 and R1 166 million incurred in prior years. 3. Irregular expenditure condoned, recovered, removed and written off Fifty-three matters to the value of R445 million were condoned during the financial year (2024: 45 matters totalling R1 159 million). A total of R43 million was recovered on one matter (2024: two matters totalling R500 million). One matter amounting to approximately R14 000 that was not recovered was written off (2024: one matter of approximately R120 000). 157 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Disclosure of information under the PFMA continued Eskom has implemented a revised process for dealing with the Disciplinary action was pending or in progress for 15 incidents incurred in FY2025 and nine incidents for continuing spend in FY2025. There were also removal of irregular expenditure that was not condoned by the 46 pending matters for FY2024, and 30 for multi-year contracts that ended in FY2024. relevant authority. Irregular expenditure to the value of R382 million was removed relating to 26 matters during the year (2024: none). In some instances, no disciplinary sanction was issued due to various reasons, including where the responsible employees left the organisation; disciplinary action was deemed not appropriate and other corrective action was applied; or the employee was found not guilty during the disciplinary Details of current and previous year irregular expenditure (under process. This was the case in 15 incidents with continuing spend in FY2025, five matters in FY2024, and seven for multi-year contracts that ended assessment, determination and investigation) in FY2024. Description, R million Note 2025 2024 FRUITLESS AND WASTEFUL EXPENDITURE Irregular expenditure under Fruitless and wasteful expenditure is expenditure made in vain that could have been avoided had reasonable care been exercised. Fruitless and wasteful Note 4 12 927 8 950 expenditure is reported in the annual financial statements and integrated report when it is confirmed. assessment or determination Irregular expenditure under Note 5 – – Fruitless and wasteful expenditure for the year ended 31 March 2025 investigation Total 12 927 8 950 Opening Total Written Closing Description, R million balance Confirmed incurred Recovered off balance 4. Irregular expenditure under assessment or determination Project management 2 504 – 2 504 – (120) 2 384 It should be noted that figures disclosed are estimated and, in Procurement and contract management 1 628 – 1 628 – – 1 628 some instances, includes the full contract value, that may not have Interest and penalties 13 8 21 – – 21 been fully expensed. Quantification of actual irregular expenditure Other 793 12 805 – (741) 64 incurred takes place during the assessment and determination Total 4 938 20 4 958 – (861) 4 097 process. Irregular expenditure under assessment or determination at year end relating to periods prior to FY2024 is estimated at Note 1 Note 3 Note 3 R28 645 million. Fruitless and wasteful expenditure for the year ended 31 March 2024 5. Irregular expenditure under investigation Confirmed If a suspicion of fraudulent, corrupt or other criminal conduct arises Prior and Prior Restated Recovered during the assessment and determination phase, the matter is Opening period As disclosed period 2024 Total and written Closing referred to a mandated investigative function. In certain instances, Description, R million balance errors restated 2024 errors expenditure incurred off balance the suspected criminal conduct does not stem from the assessment Project management 3 625 (1 121) 2 504 – – – 2 504 – 2 504 and determination process, such as matters that are directly Procurement and contract reported to the Group Investigations and Security Department or 1 627 – 1 627 – 2 2 1 629 (1) 1 628 management other investigative units. Irregular expenditure under investigation Interest and penalties 9 5 14 – – – 14 (1) 13 relating to periods prior to FY2024 is estimated at R99 million. Other 794 (11) 783 1 10 11 794 (1) 793 Details of current and previous year disciplinary action or criminal Total 6 055 (1 127) 4 928 1 12 13 4 941 (3) 4 938 steps taken as a result of irregular expenditure Note 2 Note 2 Note 1 Note 3 Warnings were issued on one new incident relating to FY2025, and nine warnings were issued on incidents with continuing spend on multi-year contracts where the transgression took place in prior years. Expenditure in FY2024 resulted in eight warnings, with 10 warnings for multi-year contracts that ended in FY2024. A sanction of suspension without pay was issued on one matter relating to FY2024 expenditure. 158 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Disclosure of information under the PFMA continued 1. Current year expenditure Details of current and previous year fruitless and wasteful MATERIAL LOSSES THROUGH CRIMINAL CONDUCT expenditure (under assessment, determination and investigation) Material losses caused by criminal conduct and any disciplinary, civil or Description, R million Note 2025 2024 criminal action taken in respect of such losses are reported in terms of Expenditure confirmed in the Description, R million Note 2025 2024 the Significance and Materiality Framework as previously agreed with the (a) 20 1 current year Fruitless and wasteful expenditure shareholder representative. Prior period errors for 2024 expenditure Note 2 12 Note 4 887 1 329 – under assessment or determination Fruitless and wasteful expenditure Losses incurred Total current year expenditure 20 13 Note 5 – – under investigation Description, R million Note 2025 2024 (a) Expenditure for the current year Total 887 1 329 Estimated non-technical energy losses (a) 7 068 6 441 Fruitless and wasteful expenditure incurred in FY2025 comprises Theft of conductors, cabling and 37 incidents (2024: 46 incidents, restated). (b) 77 120 4. Fruitless and wasteful expenditure under assessment or network-related equipment determination Fraud and corruption (c) 4 64 2. Prior period errors It should be noted that figures disclosed are estimated. Quantification Malicious damage to property (b) 77 67 2024 of actual fruitless and wasteful expenditure incurred takes place Common theft (b) – 26 2024 opening during the assessment and determination process. Fruitless and Total material losses 7 226 6 718 Description, R million Note expenditure balance wasteful expenditure under assessment or determination at year end Total prior period errors 12 (1 127) relating to periods prior to FY2024 is estimated at R11 988 million, of Losses recovered which 37% relates to a single matter regarding inventory write-offs There were restatements to the FY2025 opening balance on 99 matters, for FY2022 and FY2023. Description, R million Note 2025 2024 the net effect of which is a decrease of R1 115 million, comprising an Estimated non-technical energy losses (d) 324 229 5. Fruitless and wasteful expenditure under investigation increase in FY2024 expenditure of R12 million and a reduction of Theft of conductors, cabling and If a suspicion of fraudulent, corrupt or other criminal conduct arises (d) 5 3 R1 127 million relating to the FY2024 opening balance. The reduction network-related equipment during the assessment and determination phase, the matter is can mainly be attributed to the derecognition of potential overpayments Fraud and corruption (d) 2 1 referred to a mandated investigative function. In certain instances, on capital projects that were prematurely disclosed as fruitless and Malicious damage to property (d) 2 13 the suspected criminal conduct does not stem from the assessment wasteful expenditure, due to pending arbitration and/or litigation of Common theft (d) – 2 and determination process, such as matters that are directly contractual disputes. In addition to corrections to amounts previously reported to the Group Investigations and Security Department or Total recoveries on material losses (d) 333 248 disclosed, fruitless and wasteful expenditure that relates to years prior other investigative units. Fruitless and wasteful expenditure under to FY2025 which was concluded and quantified in the current year are investigation on one event relating to periods prior to FY2024 is (a) Estimated non-technical energy losses disclosed as prior period errors in compliance with National Treasury estimated at R4 million. Non-technical energy losses relate to losses due to electricity theft Instruction Note 4 of 2022/2023. through illegal connections, tampering and bypassing of electricity Details of current and previous year disciplinary action or criminal 3. Fruitless and wasteful expenditure recovered or written off meters, as well as the purchase of electricity tokens from unregistered steps taken as a result of fruitless and wasteful expenditure Recoveries were achieved on 62 matters totalling R293 555 during or illegal vendors. The management of non-technical losses focuses FY2025, either partial or in full (2024: 51 amounting to approximately There was a dismissal on one matter where expenditure was on ensuring that all energy supplied is accounted for, and includes R1.4 million). Losses on 17 matters of approximately R861 million were incurred in FY2024. Written warnings were issued in 10 matters initiatives to minimise non-technical energy losses. The reported losses written off as irrecoverable (2024: 26 amounting to approximately incurred in FY2025 and 12 matters incurred in FY2024. Disciplinary represent the estimated cost of non-technical energy lost. R2.4 million). action is pending or in progress for 25 incidents for FY2025 and 27 matters relating to FY2024. Non-technical energy losses are determined by applying a scientific approach to measure total energy losses as the difference between No disciplinary action was taken on one matter relating to FY2025 energy produced and energy sold. Technical energy losses are and five matters relating to FY2024 due to various reasons, including derived based on known factors of the electrical grid such as where the responsible employees left the organisation; disciplinary conductor resistance, as well as transformer and equipment losses. action was deemed not appropriate and other corrective action was The residual of total losses is attributed to non-technical losses. applied; or the employee was found not guilty during the disciplinary process. 159 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Disclosure of information under the PFMA continued The risk emanating from the bulk generation of illegal prepaid tokens Some of the initiatives being pursued include but are not limited to (c) Fraud and corruption on Eskom’s online vending system, which was identified through the following: Eskom concluded four investigations into fraud during the year an investigation, has reduced due to interventions and control • Realigning of security contracts (scope and resources) and (2024: 21, restated) where losses due to criminal conduct were enhancements and measures applied during FY2025 to mitigate optimisation of deployment incurred. The internal control measures in the affected areas have against the growth of illicit prepaid electricity tokens and • Improving the Eskom asset disposal process and strategies been reviewed and enhancements recommended for implementation non-technical losses. to the accountable line managers. This includes improving controls • Focusing on asset management and protection, through research and implementation of innovative solutions, such as unique as well as instituting disciplinary, criminal or civil proceedings against IR Refer to “Leveraging governance for transformation – Fighting crime, marking and tracking capabilities those involved. fraud and corruption” from page 75 for further information on the • Implementing policy and legislative changes to address scrap and (d) Losses through criminal conduct recovered investigation into the breach of Eskom’s online vending system market regulations Eskom recovered R333 million of material losses due to criminal • Introducing integrated, intelligent and smart security technologies conduct (2024: R248 million). Most of the value relates to non- (b) Theft of conductors, cabling and network-related equipment, and systems to reduce dependence on the human factor, such as technical energy losses. Eskom invoiced R407 million of additional malicious damage to property, common and attempted theft the use of drones, intelligent cameras and alarm systems revenue during the year (2024: R307 million), of which R324 million Theft of network-related equipment includes theft of cable, including • Implementing focused strategies and projects aimed at combatting has been received (2024: R229 million). airdac, tower members and transformers. revenue loss, through metering, vending, tampering and disruptive operations Unlawful and intentional damage to property belonging to another • Minimising breaches that allow easy access to sites and assets is reported as malicious damage to property. Vandalism is the action by improving housekeeping, appropriate storage of material and involving deliberate destruction of or damage to public or private equipment with well-functioning delay and deterring solutions to property. Damage towards any property without permission of the prevent or minimise the impact owner is reported as vandalism. • Deploying robust security systems that can detect and prevent Common theft consists of the unlawful appropriation of movable crime and provide evidence that can be used for disciplinary or property belonging to another with the intent to deprive the owner criminal proceedings permanently of the property. Property includes laptops, tools, • Ensuring consistent and continuous screening and vetting of cell phones, equipment, air conditioners and all other items not contractors and staff to prevent and minimise insider threat included in the list of Eskom essential infrastructure or security crime involvement and collusion categories. The losses incurred in 2025 due to criminal conduct • Making arrests and working with relevant role players to build relating to this category were below the materiality threshold. strong cases and dockets leading to convictions Actions to combat losses through criminal conduct are managed in collaboration with other affected state-owned entities, industry role players, law enforcement and criminal justice agencies such as SAPS and the NPA. 160 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Deviations, expansions and variations reported to National Treasury To strengthen compliance, transparency, and accountability in Supply ANALYSIS OF TRENDS Summary of high-value sole source transactions Chain Management (SCM), National Treasury implemented PFMA SCM The following divisional reporting trends have been identified when Instruction Note 3 of 2021/2022, effective 1 April 2022. This instruction compared to FY2024: Description Value note introduced revised requirements governing deviations from normal • The number of deviations increased by 44% and the value Provision of rail services for coal and other commodities R28.6 billion bidding processes – referred to as procurement by other means – as well increased by 12% Refurbishment, repair, and supply of OEM spares for boiler as expansions or variations of existing contracts. • The number of urgent procurement transactions increased by 52%, water circulating pumps, FGD valves at Kusile, feed pumps R2.7 billion Procurement by other means includes: from 774 to 1 173, and the value increased by 45%. The number of at Hendrina and pumps and valves at Grootvlei urgent transactions in Generation increased by 55% year-on-year, • Limited bidding, such as sole source, single source or multiple source Refurbishment and/or repair of pumps and auxiliaries from 710 to 1 104 R1.8 billion procurement across multiple stations • The number of emergency procurement transactions decreased by • Written price quotations not within the threshold determined by Supply and refurbishment of E-type mill and air heater 25%, although the value increased by 1 289%, primarily due to NTCSA R802 million National Treasury gearboxes and spares across various stations • The number of sole source procurement transactions increased by • Procurement that occurs in emergency situations and urgent cases 48% and the value increased by 498%, primarily due to Generation Supply of spares, refurbishment of the low-pressure rotor R630 million These mechanisms are to be applied strictly as exceptions and not as • The number of single source procurement transactions decreased by and a new gas generator for Ankerlig routine procurement practices. 4%, although the value increased by 198%, primarily due to Generation • The number of expansions and variations increased by 23%, although SINGLE SOURCE PROCUREMENT In terms of the instruction note, state-owned enterprises are permitted the value decreased by 13% The number of single source transactions decreased from 67 to 64. The to internally approve procurement transactions conducted through total value of single source transactions increased from R18.5 billion to exceptional mechanisms. Once approved, these transactions must be EMERGENCY PROCUREMENT R53.6 billion, primarily due to high-value transactions from Generation of reported to both National Treasury and the Auditor-General of South The number of emergency transactions decreased from 57 to 43. R52 billion. Africa (AGSA). All procurement activities, including those conducted The total value of emergency transactions increased from R258 million through deviations, must adhere to Section 217 of the Constitution of to R3.6 billion, primarily due to high-value transactions by NTCSA Summary of high-value single source transactions the Republic of South Africa, 1996, which requires that the procurement and Eskom Rotek Industries SOC Ltd (ERI). Key reasons include of goods and services be undertaken in a manner that is fair, equitable, Description Value plant equipment failures and system integrity risks; weather-related transparent, competitive and cost-effective. Eskom’s supply chain infrastructure damage; theft, vandalism and security risks; environmental Supply delivery and storage of diesel to Gourikwa Power R49.6 billion procedures are aligned with constitutional and regulatory requirements and compliance-related incidents; as well as operational continuity and Station and incorporate controls for monitoring and reporting of these workforce support. Construction of the ash dump facility and bulk material transactions to ensure compliance. R1.5 billion handling services at Medupi Summary of high-value emergency procurement transactions Eskom regularly reports to National Treasury upon concluding such Design and construction of drainage, dams, site R383.5 million transactions, as required. National Treasury granted Eskom approval Description Value rehabilitation and coal crushing at Medupi to report procurement by other means on a monthly basis instead of Procurement under the Emergency Generation Programme R3.3 billion Preventative machining, whip peening, core sampling and the prescribed 14-day reporting period from 14 June 2024. Contract R488.5 million Provision of labour services for ERI R90 million friction welding across various sites expansions and variations are also required to be reported monthly. National Treasury reports across state-owned entities on a quarterly basis. Freight forwarding, customs clearance, inland transport R275 million SOLE SOURCE PROCUREMENT and rentals for 10 years (as-and-when required) Based on the stipulations outlined in the instruction note, divisions have The number of sole source transactions increased from 218 to 322. reported a total of 2 152 transactions during the year (2024: 1 555). The total value of sole source transactions increased from R7.2 billion NATIONAL TREASURY TRANSVERSAL CONTRACTS Of these, 1 633 were classified as deviations from the normal bidding to R43 billion, primarily due to high-value transactions by Generation The use of transversal contracts in Generation has gained momentum, process (2024: 1 133), while 519 were identified as expansions and of R41.1 billion. Generation accounted for 79% of the sole source with 23 transactions recorded, totaling R271.4 million, primarily for the variations of contracts (2024: 422). The top contributor is Generation, transaction volume. supply and delivery of vehicles. which accounts for 82% of all transactions, followed by the National Transmission Company of South Africa SOC Ltd (NTCSA) at 5% and Distribution at 4%. The total value of all transactions amounts to R147.2 billion for the year (2024: R140.6 billion). 161 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Deviations, expansions and variations reported to National Treasury continued EXPANSIONS AND VARIATIONS OF CONTRACTS Deviations for the year ended 31 March 2025 The number of expansions and variations increased from 422 to 519. Division No Rand amounts USD amounts Euro amounts GBP amounts JPY amounts CAD amounts The total value of expansions and variations of contracts decreased from R33.6 billion to R29.2 billion. Generation accounted for 69% of the value Generation 1 421 109 209 520 703.23 17 041 688.67 17 797 581.64 218 010.00 641 162 800.00 of transactions, followed by Corporate at 12% and Distribution at 11%. NTCSA (previously 80 3 670 334 341.88 70 000.00 Transmission) Generation accounted for 65% of the number of transactions, followed by Distribution 47 589 316 640.44 Group Capital and Corporate at 9% and Distribution at 8%. Group Capital 9 794 517 641.42 Corporate: IT 27 1 157 764 304.13 29 241 912.94 Significant modifications Corporate: tactical 15 330 294 728.30 3 813 826.60 Description Value ERI 34 2 266 547 822.48 First right of refusal to offtake coal for Duvha Power Total 1 633 R118 018 296 181.88 $46 353 601.61 €17 797 581.64 £218 010.00 ¥641 162 800.00 CAD3 813 826.60 R9.8 billion Station Average exchange rate 1.00 17.83 19.29 23.17 0.0824 13.39 Supply of scaffolding and thermal insulation material R1.5 billion Converted Rand value R118 018 296 181.88 R826 484 716.62R343 315 349.84 R5 051 291.70 R52 831 814.72 R51 067 138.17 Hybrid information technology transformation R1.7 billion Total Rand value of all R119 297 046 492.93 transactions Sedans, light and heavy commercial vehicles, and buses R1.3 billion Scaffolding and insulation services R952 million Deviations for the year ended 31 March 2024 Scaffolding and thermal insulation material R944 million Division No Rand amounts USD amounts Euro amounts GBP amounts SEK amounts Generation 954 25 004 373 410.79 51 853 383.28 99 590.30 213 512.00 DEVIATIONS AND PROCUREMENT BY OTHER MEANS Transmission Division 69 75 794 168 522.78 4 957 433.00 The figure below depicts the number of deviations per division for FY2025. Distribution 50 548 678 923.86 Group Capital 13 1 291 721 365.46 1 421 Corporate: IT spend 39 2 755 140 153.57 1 765 112.00 401 220.00 Corporate: tactical spend 8 16 218 616.12 Total 1 133 R105 410 300 992.58 $53 618 495.28 €500 810.30 £213 512.00 SEK4 957 433.00 Average exchange rate 1.00 18.91 19.58 23.94 1.76857 Converted Rand value R105 410 300 992.58 R1 013 925 745.74 R9 805 865.67 R5 111 477.28 R8 767 567.28 Total Rand value of all transactions R106 447 911 648.55 80 47 34 27 15 9 ion SA n RI l l t C tio E IT ica ita era NT ibu ate act Ca p n str r eT Ge Di rpo r a t up Co p o G r o Cor Out of 1 173 urgent transactions, Generation executed 94%, NTCSA 2% and Distribution 2%, followed by Corporate and ERI at 1%. The number of contracts and amounts per division for deviations are set out below, broken down by contract currency, with the total Rand amount also being shown. 162 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Deviations, expansions and variations reported to National Treasury continued CONTRACTUAL EXPANSIONS AND VARIATIONS Expansions and variations for the year ended 31 March 2025 The figure below depicts the number of expansions and variations per Division No Rand amounts USD amounts Euro amounts AUD amounts JPY amounts division for FY2025. Generation 337 20 087 480 934.85 240 546 210.76 21 611 582.37 123 920 998.00 337 NTCSA (previously Transmission) 28 349 848 743.36 Distribution 44 3 275 222 157.07 Group Capital 48 1 490 063 646.91 Corporate IT 42 3 337 382 331.06 3 831 393.96 900 123.57 Corporate Tactical 5 15 995 045.08 ERI 15 622 926 511.95 Total 519 R29 178 919 370.28 $244 377 604.72 €21 611 582.37 AUD900 123.57 ¥123 920 998.00 Average exchange rate 1.00 17.83 18.51 11.10342 0.0824 Converted Rand value R29 178 919 370.28 R4 357 252 692.16 R400 030 389.67 R9 994 450.05 R10 211 090.24 48 44 42 Total Rand value of all transaction R33 956 407 992.39 28 15 5 Expansions and variations for the year ended 31 March 2024 t ion i tal t ion IT CSA ERI ica l ne ra Ca p trib u rat e NT act Division No Rand amounts Euro amounts USD amounts Ge p Di s rpo ateT ou Co r Gr rpo Generation 220 28 020 841 528.66 22 377 291.92 3 436 259.20 Co Transmission Division 41 924 237 163.78 Distribution 65 1 252 031 894.30 The number of contracts and amounts per division for expansions and Group Capital 55 1 180 791 204.25 variations are set out below, broken down by contract currency, with the Corporate IT 28 2 225 537 250.95 1 445 558.49 total Rand amount also being shown. Corporate Tactical 13 22 916 614.46 Total 422 R33 626 355 656.40 €22 377 291.92 $4 881 817.69 Average exchange rate 1.00 19.58 18.91 Converted Rand value R33 626 355 656.40 R438 147 375.79 R92 315 172.52 Total Rand value of all transaction R34 156 818 204.71 163 ESKOM HOLDINGS SOC LTD Integrated report 2025 Transforming energy to create value Thoughts from our leadership Our strategic and risk landscape Leveraging governance for transformation Performance overview Supplementary information ABC Corporate information ESKOM HOLDINGS SOC LTD Incorporated in the Republic of South Africa Registration number 2002/015527/30 REGISTERED OFFICE Eskom Megawatt Park 2 Maxwell Drive Sunninghill Sandton 2157 PO Box 1091 Johannesburg 2000 Switchboard +27 11 800 8111 Customer call centre 08600 ESKOM or 08600 37566 DEBT SPONSOR Nedbank Corporate and Investment Banking, a division of Nedbank Limited JSE alpha code BIESKM FOR MORE INFORMATION INVESTOR RELATIONS Lerato Mufuma-Mashinini InvestorRelations@eskom.co.za MEDIA ENQUIRIES Daphne Mokwena MediaDesk@eskom.co.za GROUP CHIEF FINANCIAL OFFICER Calib Cassim OfficeoftheCFO@eskom.co.za QUERIES OR FEEDBACK ON OUR REPORTS IRfeedback@eskom.co.za Our suite of reports covering our integrated results for 2025 is available at https://www.eskom.co.za/investors/integrated-results/ FORWARD-LOOKING STATEMENTS Certain statements in this report regarding Eskom’s business operations may constitute forward-looking statements. These include all statements other than statements of historical fact, including those regarding the financial position, business strategy, management plans and objectives for future operations. Forward-looking statements constitute current expectations based on reasonable assumptions, data or methods that may be imprecise and/or incorrect and that may be incapable of being realised. As such, they are not intended to be a guarantee of future results. Actual results could differ materially from those projected in any forward-looking statements due to various events, risks, uncertainties and other factors. Eskom neither intends nor assumes any obligation to update or revise any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise. Future performance plans and/or strategies referred to in the integrated report have not been reviewed or reported on by the group’s independent auditors. 164 Performance overview ABC www.eskom.co.za