Independent Investigation Confirms All Diesel Accounted For

Eskom has completed the independent legal assessment, diesel reconciliation and verification processes arising from its investigation into diesel procurement and storage contracts under Tender MWP2197GX.

The independent processes found no evidence that diesel paid for by Eskom is missing. The legal assessment did not sustain allegations that the procurement award process under Tender MWP2197GX was compromised.

The investigation did, however, confirm instances of non-adherence to Eskom processes concerning payments made to certain suppliers. The substantiated findings relate principally to payments outside contractual terms, and emergency approvals that did not comply with Eskom’s Delegation of Authority.

Eskom accepts the substantiated findings and is implementing corrective measures as required. This statement follows Eskom’s update of 31 July 2026, when the company advised that the investigation findings were undergoing internal corporate governance, legal review and quality assurance processes to ensure that any action met the required evidentiary and procedural standards.

Contract purpose and operating context

Tender MWP2197GX was issued by Eskom’s Generation Division in late 2023 for the supply, delivery, storage and handling of diesel and related fuels for Eskom’s Open Cycle Gas Turbine (OCGT) power stations. The contracts were structured on a five-year, as-and-when-required basis and covered fuel sourcing, transportation, storage, handling and bulk inventory management.

The contracts were awarded in late November 2024 against the backdrop of significantly improved generation performance. Eskom had at the time achieved 310 consecutive days without loadshedding, reflecting the benefits of the Generation Recovery Plan.

Consistent with Eskom’s 2024/25 Summer Outlook, the expectation at the time was that loadshedding would not be required and that any residual risk would generally be limited to Stage 1 or, in a worst-case scenario, Stage 2. However, conditions subsequently deteriorated, with loadshedding reaching Stages 3 to 6 over 13 days between late January and early March 2025. This necessitated greater utilisation of the diesel-fired generation and strategic reserves than had been anticipated when the contracts were awarded.

The previous fuel-supply contracts with major fuel suppliers with a combined value of R72.6 billion ended in December 2024, after five years, and required Eskom to transition to five newly appointed suppliers under Tender MWP2197GX from 1 January 2025 at a value of R21 billion. At the time, only three out of five newly appointed suppliers had been fully operationalised, while the other two suppliers were onboarded in February 2025, when fuel-supply pressures intensified. The transition coincided with the December shutdown period, when Eskom typically undertakes elevated planned maintenance under the Generation Recovery Plan, leveraging lower seasonal electricity demand to improve fleet reliability and prepare for winter operations. Although breakdowns had started showing an upward trend from October 2024, the rapid deterioration in the generation fleet performance in January 2025 was unexpected.

From January to March 2025, a combination of extensive generation unit breakdowns, delayed unit returns from maintenance and constrained pumped-storage reserves, placed a constrained power system under severe pressure. These conditions significantly increased reliance on Open Cycle Gas Turbines (OCGTs) and strategic reserves to maintain security of supply and limit the severity and duration of loadshedding. Figures 1&2 below illustrates that both consumption of diesel and onsite deliveries increased sharply from late January to March 2025, before declining rapidly.

At the same time, fuel-supply and logistics arrangements external to Eskom that had adapted due to an extended period of reduced OCGT utilisation with the stretch of 310 days of no loadshedding, were required to respond rapidly to sharply higher diesel demand. Supplier onboarding requirements, fuel availability constraints and transport capacity pressures further complicated the operating environment, with internal operational records noting exceptionally constrained market conditions during this period.

Diesel and pumped-storage reserves were consequently depleted faster than they could be replenished. Eskom faced a choice between enabling suppliers to rapidly source and move fuel into Eskom’s diesel supply chain or accepting a materially greater risk of prolonged higher stages of loadshedding. Relevant checks were undertaken to establish the existence and availability of fuel with the service partners contracted to Eskom’s suppliers before interventions were implemented.

The operating conditions experienced between January and March 2025 were reflected in the rapid depletion of strategic diesel reserves and constrained pumped-storage resources. During the period leading up to 1 February 2025, available generating hours at Ankerlig, Eskom’s largest OCGT facility, declined from approximately 303 hours to around 52 hours within four days as the station was extensively utilised to support the power system and limit the severity of loadshedding in a controlled manner.

At the same time, pumped-storage schemes were approaching their minimum operating levels, reducing the range of available system-support interventions as required by the system operator. The decline in fuel reserves occurred despite ongoing replenishment efforts and reflected a combination of exceptionally high diesel consumption, logistics constraints and the broader deterioration in generation performance experienced during that period.

Figure 2 demonstrates the scale of Eskom’s replenishment efforts and the resulting rectification of the diesel reserves once the fuel deliveries were completed. Available generating hours at Ankerlig recovered from approximately 52 hours to around 250 hours within two days and to approximately 300 hours within five days, restoring operational flexibility and rebuilding reserves while the OCGT fleet continued supporting the power system.

The objective was to protect the power system and limit the severity and duration of loadshedding. The wider consequences of sustained loadshedding were significant. The Council for Scientific and Industrial Research (CSIR) estimated that loadshedding during 2023 had an economic impact of up to R2.8 trillion through lost economic activity and reduced output across the economy. Against this backdrop, maintaining security of supply remained the overriding operational priority.

In certain instances, payments outside ordinary contractual payment arrangements were used to enable suppliers who could supply fuel to secure and move fuel into the supply chain. The chronology does not indicate that such arrangements were contemplated when the contracts were awarded. They arose later in response to rapidly deteriorating system conditions and urgent fuel requirements.

Advance payments had also been made under the previous fuel-supply contract with major fuel oil suppliers that were in effect since 2019 and expired in December 2024 in urgent operational circumstances. This may have contributed to advance payment being viewed as an available operational mechanism. However, previous use did not remove the requirement to obtain the prescribed approval or, where action was taken before approval, to complete the required ratification promptly thereafter as per governance processes for handling emergencies.

“The period between January and March 2025 placed significant demands on the power system and required rapid operational responses and difficult decisions by employees and executives to maintain security of supply and protect grid stability. However, operational pressures do not diminish our obligation to comply fully with internal controls and governance requirements,” stated Eskom’s Group Chief Executive, Dan Marokane.

“Independent verification processes have confirmed that all diesel paid for was delivered and/or accounted for within Eskom’s supply chain or contractual terms. While the investigation identified procedural and governance shortcomings, Eskom began implementing corrective measures as these issues were identified, including strengthening probity and oversight controls that were suspended in October 2022, enhancing contract management processes, and initiating accountability measures where warranted,” continued Marokane.

“We will continue to act on the investigation’s findings, including implementing consequence management where non-compliance with governance processes has been identified, as well as enforce consistent execution, accountability and monitoring of controls to ensure our governance and procurement processes remain robust, transparent and beyond reproach,” concluded Marokane.

Investigation findings and accountability

Eskom initiated the investigation in March 2025 following the monitoring of contract performance during operational emergencies that involved loadshedding in early 2025, together with information received through established reporting and whistleblowing mechanisms. Eskom appointed independent forensic investigators and commissioned separate legal, reconciliation and verification reviews.

On 15 May 2026, Eskom announced that the interim investigation report had identified instances of non-adherence to Eskom processes in both the procurement of the services and the management of the contracts. Further documentary analysis, supplementary interviews and legal assessments were subsequently undertaken.

The completed assessment substantiated shortcomings relating to payments outside contractual terms, and non-compliance with Delegation of Authority.

The payments made outside contractual terms during early 2025 involve approximately R3 billion across three suppliers. These matters relate primarily to governance and approval noncompliance rather than missing diesel or financial loss. Accounting for the fuel does not remove Eskom’s obligation to investigate and address any contractual or approval non-compliance.

Supplier-related matters are being considered through the applicable contractual and supplier-review processes. Any action will be based on the evidence relating to the relevant supplier, the contractual provisions and prescribed due-process requirements.

Under the previous contract with major fuel oil suppliers concluded in 2019, an irregular expenditure of approximately R38 billion was identified by the Eskom Loss Control Function in June 2026. The irregular expenditure relates to expenditure incurred without obtaining approvals from the relevant delegated authority. Whilst no financial loss has been identified, however the matter has been referred to Eskom’s Group Security & Investigation for investigation. Further action will be informed by the outcome of the investigation and the available evidence.

The historical R38 billion matter from the contracts concluded with major fuel oil suppliers in 2019 and the approximately R3 billion matter associated with the 2025 fuel-supply contracts are separate. Both have been reported through Eskom’s relevant governance structures and external auditors, with further reporting to National Treasury in accordance with applicable requirements.

Independent verification of diesel volumes found no missing diesel as records show the surplus is in storage or available on demand when scheduled

Eskom commissioned independent reconciliation and verification processes to determine whether diesel paid for had been delivered, consumed, or remained available for scheduled delivery.

The independent verification covered diesel paid for by Eskom from the commencement of the contracts under Tender MWP2197GX through to 30 June 2026. The verification included the reconciliation of diesel purchased, delivered, consumed, stored and available when scheduled, together with site inspections, inventory records, stock certificates, supplier confirmations and related contractual documentation.

The verification confirmed that diesel volumes paid for by Eskom remained available in storage facilities operated on behalf of suppliers and were supported by inventory and stockholding records maintained by the terminal operators, and/or available for scheduled delivery when required by Eskom, i.e. there is no missing diesel.

Taken together, the independent reconciliation, site inspections and documentary verification found no discrepancies between diesel procured, delivered, consumed, stored or available when scheduled and the amounts paid by Eskom from the commencement of the contracts through to 30 June 2026. No evidence was found that diesel paid for by Eskom is missing.

Since mid-2025, improved generation performance has substantially reduced reliance on OCGTs. Year-to-date diesel usage is more than 83% lower than during the corresponding period in the previous year.

Portions of the contingency stocks secured during the period of severe system pressure consequently remained available and were confirmed through the independent processes and has not been scheduled for consumption.

Strengthened governance and controls

The recurrence of approval and ratification shortcomings across different contractual periods demonstrates that lessons from earlier transactions were not embedded effectively enough in Eskom’s controls and institutional practices.

In October 2022, Eskom discontinued the central panel responsible for proactive assurance and full-scope probity reviews on procurement transactions exceeding R500 million. Subsequent reviews generally focused on anti-bribery, fraud and anti-money-laundering checks, reducing the breadth of scrutiny over procurement compliance, contract governance and Delegation of Authority requirements.

The discontinuation has not been established as the direct cause of the shortcomings identified. It did, however, reduce the breadth of independent scrutiny available to identify and escalate procurement, approval and governance risks.

From late 2025, Eskom reinstated proactive assurance and full-scope probity reviews, retrospectively for selected transactions and prospectively for all high-value tenders. Eskom is also:

• Reviewing and clarifying its Delegations of Authority and procurement procedures to enable agile and lawful emergency decisions;
• Strengthening approval, ratification and escalation requirements for urgent operational decisions;
• Improving the documentation and oversight of such decisions; and
• Providing training and support to the executives and employees responsible for implementing them.

Based on the preliminary findings of the final independent report, Eskom referred certain matters to the Directorate for Priority Crime Investigation, also known as the Hawks, in accordance with section 34 of the Prevention and Combating of Corrupt Activities Act. Eskom will continue making referrals to law-enforcement authorities where evidence warrants further investigation or action.

Conclusion

Eskom is addressing the substantiated findings through consequence management and strengthening its controls to reduce the risk of recurrence.

The power system is now in a materially different position from the conditions experienced in early 2025. Improved generation performance and reduced dependence on diesel-fired generation have enabled OCGTs to return largely to their intended role as strategic peaking and reserve resources.

As Eskom continues to strengthen and stabilise the power system, the company remains committed to sustaining the gains achieved through the Generation Recovery Plan, maintaining security of supply, improving governance and accountability, and ensuring that the lessons arising from this matter result in stronger controls and better decision-making.

Eskom will continue building a resilient and sustainable business capable of reliably serving South Africa, while safeguarding public resources and holding employees, suppliers and other parties accountable where substantiated evidence supports action.

Reporting concerns

Eskom calls on the public to report any illegal activity affecting its operations to the Eskom Crime Line on 0800 112 722 or via WhatsApp on 081 333 3323.

Courtesy of Eskom

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