Eskom redeems $2.2 billion bond after 19 years in markets    

South Africa’s state-owned power utility, Eskom Holdings SOC Ltd.,has redeemed its ES26 bond, a R38 billion ($2.2 billion) instrument issued in March 2007 at a 7.85% coupon.

The move marks a milestone in the company’s efforts to steady its finances after nearly two decades in the debt market. 

The utility said Tuesday the repayment reflects firmer control of its balance sheet and a gradual move toward standing on its own financially. 

“The redemption of the ES26 bond shows the progress we are making and our focus on sound financial management,” Group Chief Executive Dan Marokane said.

ES26 grew from $30 million to $2.2 billion

Originally issued as a R500 million ($30 million) tranche, ES26 grew over time into a R38 billion ($2.2 billion) benchmark through 53 separate issuances, supported by steady demand from investors. 

Eskom said about R9 billion ($533.3 million) was raised through 30 public auctions, with the balance coming from reverse enquiries and liability management transactions. Over the years, the bond became one of the utility’s main long-term funding instruments. 

Its structure and scale were recognized early on, earning a 2007 Spire Award from the Johannesburg Stock Exchange. 

Marokane said the repayment was also supported by the government’s debt relief measures and an improvement in Eskom’s financial performance over time.

Eskom bond redemption eases borrowing risk

Analysts say the bond’s redemption could help ease Eskom’s risk profile, potentially lowering borrowing costs as it returns to capital markets. 

Marokane said meeting the conditions tied to debt relief is helping create a more stable investment climate. He added that tighter financial discipline allows the utility to meet its obligations without placing added pressure on the state. 

Still, Eskom faces ongoing challenges as South Africa reforms its energy sector. The company continues to focus on improving revenue collection and running its operations more efficiently to support longer-term stability. 

Marokane leads efficiency overhaul at Eskom

Eskom, fully owned by the South African government, operates across generation, transmission, and distribution, and trades electricity within the Southern African Development Community. 

Under Marokane, who has nearly three decades of experience managing large-scale operations in energy, manufacturing, and resources, Eskom has focused on efficiency and strategic operational improvements. The CEO oversees annual procurement budgets of roughly R100 billion ($5.92 billion) and capital expenditures of R60 billion ($3.55 billion). 

Last month, Eskom’s Koeberg Unit 2 achieved 99.4% output after running nonstop for a full year, delivering 946 MW to Cape Town and reinforcing South Africa’s power grid.