REDCLIFF Municipality has received $7 million from Treasury as part of the repayment of a $14 million debt accrued by the now defunct Ziscosteel.
The steel manufacturing plant closed down operations in 2008 after it faced operational constraints.
Redcliff Mayor Councillor Clayton Masiyatsva said: "This past week, we received $7 million from Treasury as part of the debt we were owed by Zisco. As you know, Government assumed the Zisco debt and we are grateful they have started paying."
In 2017, the Government assumed all the company's outstanding arrears under the Zisco Debt Assumption Bill.
Cllr Masiyatsva said Government had assured the local authority that the balance would be paid before the end of the year.
"We are hopeful that they will be able to pay the balance by year-end as they promised," he said.
"The money had been long overdue and we are very grateful to Government for the gesture and showing commitment."
Cllr Masiyatsva said the money boosted their coffers and the local authority had paid its outstanding water debt to Kwekwe City Council.
"This was a timely boost which has boosted our coffers and enabled us to cover pressing issues," she said.
"Just today, we have paid $1 million to Kwekwe City, who are currently supplying us with water. We hope to continue paying them until we clear the debt."
Redcliff, which has been relying on Kwekwe City for water supply since the closure of Zisco, has been failing to settle the water debt which was hovering around $3,5 million.
Cllr Masiyatsva said they had managed to pay outstanding workers' salaries and bonuses.
"Using the money, we have also managed to clear some arrears that we had in terms of salaries," she said.
"We are hoping that by year-end we would have cleared the outstanding balances. We have also managed to timeously pay our workers' bonuses."
The local authority has been dogged by viability challenges owing to shrinking cash inflows.