Eskom has uncovered a widespread fraud scheme within its own ranks, where employees allegedly colluded with external operators to generate and sell fraudulent prepaid electricity tokens.
Eskom electricity token system breached by insiders
The revelation was made by Eskom Group Chairman Mteto Nyati during a presentation on Eskom’s FY2024 performance before the Portfolio Committee on Electricity and Energy, on Friday.
According to Nyati, Eskom’s internal controls on its prepaid ecosystem were breached, allowing for the bulk generation of illegal tokens that were then sold to suppliers outside of legitimate Eskom vending channels.
A forensic investigation is now underway to determine how deep the fraud runs and who was involved.
The biggest challenge Eskom faces now is that there is no system in place to isolate or track these fraudulent tokens.
This means the company is unable to reliably estimate the financial damage or even determine how many illegal tokens remain in circulation and are still compatible with Eskom’s prepaid meters.
Nyati described the development as a serious security failure, adding that tighter controls would need to be implemented to prevent further losses.
Eskom has not disclosed how long the illegal scheme had been running or how much revenue the utility might have lost as a result.
Beyond the prepaid token fraud, Eskom also highlighted accounting complications following the disposal of its Transmission business to the National Transmission Company South Africa (NTCSA).
The power utility had to derecognise a deferred tax asset worth R36.6 billion, a move that significantly affected its balance sheet.
Additionally, Eskom is responding to irregularities flagged by external auditors, though details of these findings were not fully disclosed during the presentation.
NERSA approves tariff hike despite public outcry
The revelation about internal fraud comes just a day after the National Energy Regulator of South Africa (NERSA) approved a three-year electricity tariff increase, ensuring that South African households will pay more for power from 2025 onwards.
Under the new pricing structure, Eskom has been granted a 12.74% increase in 2025, followed by 5.36% in 2026 and 6.19% in 2027.
These increases, while lower than what Eskom initially requested, have still been met with strong public opposition.
NERSA confirmed that it received over 1,200 public objections, with many critics arguing that higher tariffs place an unsustainable financial burden on already struggling households.
Eskom had initially sought a massive 36.15% hike for 2025, citing financial instability and the need to maintain operations as the reason for its request.
However, NERSA ruled that such an increase would be unjustifiable, balancing Eskom’s financial needs with the economic reality of ordinary South Africans.
Despite the increase, Eskom continues to battle operational and financial challenges, including stabilising the national grid.
During the same presentation, Eskom CEO Dan Morakane confirmed that loadshedding would likely return this weekend for the first time in 10 months.
“We’ve had multiple unit trips of two big stations early in the week, and we are busy trying to get those back online over the weekend. We’ve had to rely on our reserves to keep ourselves going, but we need to replenish those reserves over this weekend. As such, we will shortly be issuing a note that we are at high risk of loadshedding after 10 months of uninterrupted power supply,” he revealed.
With fraudulent prepaid tokens still in circulation, ongoing financial constraints, and the new tariff hikes, South Africans can expect continued pressure on electricity pricing and Eskom’s operations in the coming years.