Municipalities owe Eskom R120.26bn in overdue debt, Ramokgopa says
Municipalities owed Eskom R120.26 billion in overdue debt as at July 31, 2026, while only 10 of 71 participants in the Municipal Debt Relief Programme were fully meeting monthly-payment conditions, Minister Kgosientsho Ramokgopa says.
Electricity Minister Kgosientsho Ramokgopa has disclosed that municipalities in South Africa owe the power utility Eskom over R120.26 billion in unpaid bills as of July 2026. Speaking in response to questions from IFP MP Nompumelelo Mhlongo, Ramokgopa emphasized that this substantial debt represents the most significant threat to Eskom's financial stability. He projected that without intervention, the debt could surge to R358 billion by the 2031 financial year.
Mhlongo inquired about the current outstanding municipal debt to Esko, following Johannesburg's recent payment of a R5.25 billion arrears. Ramokgopa confirmed that the City of Johannesburg had settled its debt in full. He also announced the formation of an Eskom Restructuring Task Team under the National Treasury to devise comprehensive solutions across all government levels to tackle this issue.
Eskom's financial performance in the 2026 fiscal year suffered due to unpaid municipal, metro, and residential accounts, with R15.8 billion, or 4.5% of revenue, not recognized as revenue due to the high risk of non-payment. This figure rose from R11.9 billion in the 2025 fiscal year.
Currently, 83 municipalities are under Eskom's formal debt-recovery processes, with 71 of them participating in the National Treasury's Municipal Debt Relief Programme. According to a recent report, 50 of these municipalities owed Esko a combined R40.5 billion in August 2025, accumulating since the program's inception in 2023.
To improve municipal payment performance, Eskom collaborates with defaulting municipalities through Distribution Agency Agreements, providing technical support and managing their billing and revenue collection. While the program has seen limited success, with only 10 of the 71 participating municipalities fully adhering to the National Treasury's conditions, Eskom continues to implement targeted measures like extended payment terms and interest suppression to aid municipalities in addressing their payment challenges.
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