Eskom debt: Government to write off billions of municipalities’ bills

Over 60 municipalities that owe Eskom for unpaid bulk electricity services have applied for government’s debt relief arrangement.

This was revealed by Finance Minister Enoch Godongwana when he delivered the Medium Term Budget Policy Statement (MTBPS) at the Cape Town City Hall on Wednesday.

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MUNICIPALITIES WANT THEIR ESKOM DEBT CLEARED

During his speech, Godongwana said by October 2023, 67 applications had been submitted, totalling R56.8 billion or 97 % of the total municipal debt owed to Eskom in end-March 2023.

“Twenty-eight applications have been approved; the remainder are being assessed and verified with provincial treasuries,” Godongwana said.

The programme was announced during the Budget Speech earlier this year to assist ailing municipalities who are struggling to pay their electricity bills.

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GOVERNMENT INTRODUCES SUPPORT TO RELIEVE MUNICIPALITIES

Godongwana said the debt-relief arrangement for Eskom outlined in the 2023 Budget noted that a large proportion of outstanding municipal debt is owed to Eskom. The national government has since introduced support to relieve municipalities of debt to Eskom.

“The debt will be written off over three years in equal annual tranches. This is provided the municipality complies with set conditions. These conditions include enforcing strict credit controls, enhanced revenue collection [and] up-to-date payment of Eskom’s monthly current account.
“The ultimate goal is the profound transformation of these municipalities by empowering them to build financial resilience, amplify their capacity to generate sustainable revenue, and rekindle a culture of paying for services rendered,” Godongwana said.

ALSO READ: City of Tshwane owes Eskom R1.9b as it defaults on its debt