The hollowing out of Eskom: De Ruyter's prophecy becomes reality

André de Ruyter warned this would happen. As Eskom CEO, he flagged the risk of a revenue death spiral — major customers fleeing to private power, leaving the utility stranded with ballooning municipal debt and no reliable income base. It's no longer a warning. As MyBroadband reports, Namibia is building green hydrogen capacity at scale. Botswana is aggressively pursuing renewables. Lesotho just signed a R102 billion hydropower deal with a US developer. Domestically, demand has dropped by the equivalent of Stage 4 load shedding. Fewer customers mean higher tariffs, which drive more customers away. The spiral has started turning..By Luis Monzon.Former Eskom CEO André de Ruyter predicted that the utility’s primary revenue base would hollow out as major electricity customers began looking towards private producers and embedded capacity.This is already happening among the Southern African countries to which Eskom exports electricity, with a worst-case scenario seeing the utility miss out on R18.8 billion each year.Countries like Namibia, Botswana, and, most recently, Lesotho have signed multi-billion-rand agreements with private power providers to generate large amounts of renewable electricity.The countries sought to reduce their reliance on Eskom and cut their substantial sums paid to South Africa for electricity.According to Electricity Minister Kgosientsho Ramokgopa, South Africa, through Eskom, supplies electricity to eight Southern African countries.These are Botswana, the Democratic Republic of Congo, Eswatini, Lesotho, Mozambique, Namibia, Zambia and Zimbabwe.“The total monetary value of electricity sold to Southern African countries is forecasted to be R18.8 billion for the financial year ending 31 March 2026,” he said in a parliamentary answer in May.This amount represents a lucrative, reliable yearly boost to revenues from South Africa’s neighbours amid R111 billion in outstanding local municipal debt owed to Eskom.De Ruyter warned that without a reliable revenue base, Eskom would be left stranded with ballooning municipal debt, forcing it to rely on constant state bailouts to continue operating.In October 2025, the African Development Bank (AfDB) approved approximately R164.78 million loan to Hyphen Hydrogen Energy, a Namibian green hydrogen development company.The company aimed to use the investment to support an upcoming green ammonia project valued at more than R164 billion, potentially positioning Namibia as a pioneer in green hydrogen energy.AfDB said that the project will rely on Namibia’s reliable solar and wind energy resources to generate 3,750 MW of renewable energy and 1,500 MW of electrolyser capacity in its first phase.Once completed, the project is expected to deploy 7,500 MW of renewable energy generation capacity, more than 10 times Namibia’s current installed capacity..Botswana and Lesotho are investing in renewable energy.That same year, Botswana’s Minerals and Energy Minister Bogolo Kenewendo announced that the country would secure 50% of its national energy generation from renewable energy sources.Kenewendo said that the country would rely on solar, wind and other renewable technologies with a planned contribution of 1,938MW from renewable sources by 2030.As of last year, the country had 832 MW of contracted renewable capacity, accounting for 8% of its energy mix. It has aggressively targeted independent power producers to increase capacity.Botswana is upgrading its Mmadinare Solar Power Plant to add 50MW of capacity, bringing its total to 100MW.Additionally, it has earmarked another solar project for construction, the Jwaneng Solar Power plant, which is being developed by a private company for the country.Several other renewable energy projects are in the pipeline to accelerate its transition away from fossil fuels. The Letlhakane project combines solar and wind power to generate 200 MW.Meanwhile, the Maun project is a 200 MW concentrated solar power (CSP) facility under development in the country.On 6 June, the landlocked kingdom of Lesotho signed what it called the largest investment commitment in the country’s history to develop a 1,200MW hydropower project.It agreed to a R102 billion deal with US renewable energy developer Convalt Energy to develop the hydropower project and an AI data centre near the Kobong Dam.Once completed, the project would increase Lesotho’s installed generation capacity by more than 16 times, potentially enabling the country to become self-sufficient.The country currently has only 72MW of installed generation capacity and imports the majority of its electricity from neighbouring countries.“This presents an opportunity for Lesotho to strengthen its energy independence, reduce reliance on imported electricity, create jobs, stimulate local enterprise development,” a spokesperson said.“While feasibility studies and other processes still lie ahead, the signing of this agreement is a strong statement of intent and a clear indication of the direction in which Lesotho is moving.”.Eskom electricity demand drops.In addition to losing exports, data from the National Transmission Company of South Africa (NTCSA) showed that Eskom’s residual energy demand has declined substantially.Between 1 January and 24 May 2026, Eskom recorded 69,492 GWh of electricity demand, compared to 77,030 over the same period in 2025.The utility also previously announced that it expected energy sales of 179,000GWh for the financial year ending March 2026.Eskom’s average hourly electricity demand is approximately 4,000MW lower than it was in 2021, equivalent to the demand it shed from the grid during stage 4 load shedding.Experts have said that two main factors have led to the decline in demand for Eskom’s electricity. The first was the closure of a large number of major customers.A significant number of smelters and factories across South Africa have closed down in recent years owing to years of economic downturn.The other major factor is the rapid adoption of renewable energy, either from self-generated or from private power producers.Between 2018 and the first quarter of 2026, Nersa registered over 19,300MW of generating capacity across power plants with outputs greater than 100 kWp.Large retailers like Shoprite Group and mining giants like Sibanye-Stillwater are among these companies adding additional private solar capacity.As Eskom’s customer base shrinks, it must begin to raise electricity tariffs to avoid losses and avoid asking the South African government for bailouts.On 1 April, Eskom implemented an 12.74% tariff increase on its direct customers. Homes and businesses supplied through municipalities will see their electricity prices rise from 1 July 2026..*This article was originally published by MyBroadband and has been republished with permission..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

The hollowing out of Eskom: De Ruyter's prophecy becomes reality

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