Eskom pins hopes on government’s municipal debt relief scheme

A high-level intervention and continuous co-ordinated multi-stakeholder approach is required to curb arrears debt, says Eskom.

The power utility has pinned its hopes on the municipal debt relief programme facilitated by the National Treasury to support municipalities in dealing with their debt challenges.

“Over the years, arrears debt — particularly municipal debt — has grown to unsustainable levels. As at end of March 2023, arrears municipal debt was R58.5bn, a 30% year-on-year increase from R44.7bn in March 2022,” it said.

The top 20 defaulting municipalities account for about 78% of arrears municipal debt.

Eskom's efforts to address the debt have been unsuccessful.

Most municipalities have applied to the Treasury for debt relief. Eskom said 52 of these have received approval, with six granted conditional approval.

Though this is encouraging, some have not yet responded positively and Eskom continues to engage these municipalities and National Treasury,” said Eskom group executive for distribution Monde Bala.

The power utility said it has not yet processed any debt write-offs, as the debt relief has conditions municipalities must comply with over the next three years.

Eskom will process the first debt write-offs only after municipalities meet conditions to the satisfaction of the Treasury for 12 consecutive months.

According to the power utility, the debt relief applies to municipalities and does not include other customer categories.

Eskom has mechanisms to assist direct residential customers facing challenges in settling their accounts. “However, as is the case with any business, customers who do not pay their monthly accounts and fail to engage leave Eskom with no option but to implement credit control management processes, including interruption of services.”

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