Eskom's debt crisis was the ultimate bill for three decades of corruption and mismanagement. By 2023, the utility owed approximately R400 billion — roughly 7% of South Africa's GDP. The debt was accumulated through corrupt coal supply agreements (Gupta-linked Tegeta, among others), the disastrous "new build" programme (Medupi and Kusile power stations, originally budgeted at R69 billion each, ultimately costing over R300 billion combined and still not fully operational), fraudulent diesel procurement, and systematic infrastructure neglect.
In February 2023, Finance Minister Enoch Godongwana announced the debt relief plan in the national budget: R254 billion in Eskom debt would be taken over by the government over three years. The first tranche of R78 billion was allocated in 2023/24. The conditions included Eskom not taking on new debt, improving governance, progressing with unbundling into generation, transmission, and distribution entities, and improving plant performance.
President Ramaphosa appointed Kgosientsho Ramokgopa as Electricity Minister in March 2023, tasked specifically with resolving the energy crisis. The creation of a dedicated ministry was a governance innovation acknowledging the crisis scale.
Critics pointed out that the R254 billion was effectively a bailout of corruption — taxpayers paying for Gupta coal contracts, for Medupi and Kusile cost overruns inflated by corrupt contracting, and for decades of cadre-deployed managers who ran the utility into the ground. No individual was required to pay back stolen money as a condition of the bailout. The Zondo Commission's recommendations for prosecution of Eskom-related corruption were proceeding glacially while the bailout proceeded at speed.
The opportunity cost was massive. R254 billion could have funded approximately 5 million RDP houses, or water infrastructure for 15 million people, or 10 years of university education for 2 million students. Instead, it cleaned up the balance sheet of a utility destroyed by the very political party now administering the bailout.