South Africa’s state-owned power utility, Eskom Holdings SOC Ltd., saw its first-half profit climb 36 percent as it stabilizes electricity supply and prepares for major transmission upgrades alongside a new renewable-energy division, according to Bloomberg.

Earnings for the six months ending September 30 reached 24.3 billion rand ($1.4 billion), up from 17.8 billion rand in the same period last year. The improvement follows efforts to boost plant reliability, complete overdue maintenance, and reduce the rolling blackouts that have constrained the country’s economic growth.

Eskom, however, remains weighed down by unpaid municipal debts. Municipal arrears rose to 105 billion rand by the end of September, up from 90.1 billion rand in March, with the National Treasury instructing Eskom to write off 3.6 billion rand of overdue amounts, Bloomberg noted.

“These arrears pose a substantial risk,” Eskom said in a statement cited by Bloomberg, warning that unresolved municipal debt could impede the planned legal separation of its distribution operations into three independent entities, affecting liquidity and long-term financial sustainability.

The utility plans to accelerate investment in transmission infrastructure and establish a renewable-energy unit as part of broader efforts to modernize South Africa’s power system and support economic growth.