Home OIL AND ELECTRICITY SOUTH AFRICA: Court authorizes higher electricity rates

SOUTH AFRICA: Court authorizes higher electricity rates


The High Court Division located in the province of Gauteng in northern South Africa supported an increase in electricity rates during fiscal year 2021/2022. The public electricity company, Eskom, will be able to legally raise the standard consumers by around 16% from 1 April 2021. The South African National Energy Regulator (Nersa) was given the green light to add R$10 billion (over US$670 million) to Eskom’s revenues by recovering more funds from customers in fiscal year 2021/2022.

This announced increase in electricity rates is justified by the financial difficulties encountered over the past several months by the public electricity company, Eskom. Its managing director, André de Ruyter, recently said that Eskom lost more than 20 billion rand (about $1.2 billion) in the 2019/20 fiscal year. A situation that has caused power outages across the country over the past several months, contributing to the worsening economic crisis affecting South Africa, the country most affected by Covid-19 in Africa with 1,496,439 reported cases. According to the Managing Director’s projections, Eskom forecasts a net loss of R 26.2 billion for the current fiscal year ending in March 2021, not to mention the fact that the company is carrying a considerable debt estimated at R 484 billion. Despite the government’s subsidy of R 49 billion in 2020, the company was unable to pay down part of its debt.

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Eskom says the new tariffs will help stabilize electricity supply across the country, just as they will allow the South African government to address other priorities.

Founded in 1923 by the Electricity Supply Commission, Eskom is a South African electricity generation and distribution company. It has a monopoly on the transmission of electricity, but manages distribution with more than 180 licensed municipalities


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