AMABHUNGANE: UPDATE: Eskom admits to R3-billion in payments ‘outside of contractual terms’

Eskom has acknowledged making R3 billion in payments “outside of contractual terms” to its diesel suppliers, according to a seven-page press release issued on Thursday, 27 August 2026. The company confirmed that these payments occurred between January and April 2025, during a period of heightened energy crisis marked by frequent load shedding. While Eskom described the payments as “advanced payments” rather than prepayments, the admission aligns with allegations raised by the anti-corruption watchdog amaBhungane. The payments were directed to three suppliers, all of whom struggled to meet Eskom’s demand for diesel. Eskom’s CEO, Dan Marokane, stated that the period between January and March 2025 imposed severe operational pressure, requiring urgent actions to ensure grid stability and electricity supply. He emphasized that while such measures were necessary, they should not compromise compliance with internal controls and governance protocols. Eskom noted that it had previously made similar payments to diesel suppliers in order to prevent load shedding. However, the company clarified that prior instances did not justify bypassing formal approval procedures. According to the statement, any payments made without proper authorization must be ratified promptly through established governance mechanisms. The controversy surrounding the payments intensified due to their timing and recipients. At the time, Eskom was grappling with a severe shortage of diesel, and the chosen suppliers were unable to deliver fuel at the required speed. Minutes from a high-level meeting held on 23 February 2025 reveal that Eskom’s head of generation, Bheki Nxumalo, expressed frustration with the performance of current contractors, stating that they were “just not performing at the levels that we want to see.” By early March 2025, Eskom had already made four prepayments to its diesel suppliers. One supplier, Severino Industries, received two additional payments totaling R852 million in the following weeks. These payments were made despite ongoing concerns about the reliability of fuel delivery. Eskom has yet to address the discrepancy between its public statements and the documented evidence of continued payments even after load shedding subsided. In addition to the R3 billion in payments under the current contract, Eskom disclosed that it had identified R38 billion in irregular expenditure linked to previous diesel contracts, which concluded in December 2024. The company stated that these irregularities involved expenditures made without the required approvals from designated authorities. Although no financial loss was identified, the matter was forwarded to Eskom’s Group Security & Investigation unit for further examination. Eskom informed its auditors and the National Treasury about both sets of irregular expenditures. However, recent investigations suggest that the payments under the current contract extended beyond the initial timeframe mentioned in the press release. For example, in July 2025, Eskom made two payments totaling R360.5 million to Lanele Resources and logged 40 million liters of diesel as “received” in its SAP system. By late 2025, only a small portion of the promised diesel had arrived, effectively creating a R721 million prepayment. These findings highlight potential inconsistencies in Eskom’s reporting and raise questions about the transparency of its financial practices. The company has not yet responded to the allegations regarding the duration and impact of the payments, leaving room for further scrutiny. As the situation unfolds, the focus will remain on whether Eskom adhered to its own governance standards and how these irregularities affect its ability to manage the country’s energy challenges.