Municipalities owe Eskom R120 billion
Municipalities owed Eskom R120.26bn at the end of July, while only 10 of 71 participants in the debt-relief programme were meeting the requirement to settle current accounts monthly, the energy minister says.
Municipalities in South Africa owe the power utility Eskom more than R120 billion as of the end of July, according to Electricity and Energy Minister Kgosientsho Ramokgopa. This significant debt poses the greatest threat to Eskom's financial sustainability, with projections suggesting it could rise to R358 billion by 2031 if no decisive action is taken, Ramokgopa warned.
The City of Johannesburg recently settled its overdue R5.25 billion electricity debt, providing a glimmer of hope. Eskom has established a Restructuring Task Team to develop solutions across government spheres to address the municipal debt challenge. Currently, 83 municipalities are under Eskom's formal debt-recovery processes, with 71 participating in the National Treasury's Municipal Debt Relief Programme. Of these, 50 municipalities owe a combined R40.5 billion since the programme's introduction in 2023.
Eskom is implementing various measures to improve municipal payment performance, strengthen electricity operations, and enhance revenue collection. This includes partnering with defaulting municipalities through Distribution Agency Agreements, providing technical teams to build municipal capability, and managing billing and revenue collection for the municipalities. Eskom has also extended payment terms, ring-fenced debt with interest suppression, and offered debt write-offs under strict conditions.
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