South Africa: Eskom Hopeful of Positive Municipal Debt Relief Programme Results

Eskom is pinning its hopes on the Municipal Debt Relief programme facilitated by National Treasury to support municipalities in dealing with their historical debt challenges.

According to the power utility, unpaid municipal bulk electricity supply debt has - as at March this year - reached some R58.5 billion.

"Over the years, arrear debt, particularly municipal debt, had grown to unsustainable levels. Eskom continues to make efforts to address the arrear debt. However these have not yielded the desired outcome, as the debt continued to escalate.

"A high-level intervention and continuous, coordinated multi-stakeholder approach is required, and Eskom pins its hopes on the Municipal Debt Relief programme facilitated by National Treasury to support municipalities to deal with their historical debt challenges. Eskom welcomes the Municipal Debt Relief, as it is seen to be improving its cash flow," the power utility said.

The programme's aim is to relieve the municipalities of Eskom debt over a three year period , with conditions including:

  • Enforcing strict credit controls
  • Enhancing revenue collection
  • Ensuring up-to-date payment of Eskom monthly current account

At least 52 municipalities have been approved for the programme.

"Eskom has not processed any debt write-offs at this stage, as the Municipal Debt Relief has conditions that the municipalities must fulfil over the next three years. Eskom would be required to process the first portion of debt write-off only after municipalities have met the set conditions to the satisfaction of National Treasury for 12 consecutive months," the power utility explained.

Turning to residential customers, the electricity provider encouraged residents to make use of mechanisms available to pay their bills.

"Eskom has mechanisms in place to assist its direct residential customers facing challenges in settling their accounts in full. However, as it 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.

"Payment for services is critical for the sustainability of any service provider, including Eskom. Therefore, Eskom urges all South Africans to pay for services they consume," the power utility concluded.

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