Eskom launches public consultation on plan to cut power to indebted municipalities
South African state-owned utility Eskom has launched a public consultation on a proposal to interrupt electricity supply to around 14 municipalities that have accumulated significant unpaid debt.
According to figures released by the utility, municipal debt across South Africa has now surpassed ZAR 110 billion ($6.6 billion). The rising arrears persist despite a municipal debt relief programme introduced by the National Treasury of South Africa, which offers financial support to municipalities provided they meet a set of compliance conditions related to their Eskom obligations.
In a statement, Eskom said the municipalities involved — whose identities have not yet been publicly disclosed — have either failed to settle their accounts for at least the past 18 months, have not complied with the conditions of the debt relief programme, or represent a significant financial risk to the utility.
The company added that it has exhausted available remedies under the Intergovernmental Relations Framework Act and has begun issuing formal notices under the Promotion of Administrative Justice Act to the affected municipalities.
“Should the municipalities fail to take corrective action, Eskom will proceed with credit control measures, which may include interrupting electricity supply at predetermined times, as permitted by law,” the utility said. “If defaults persist, Eskom will be compelled to limit supply to levels commensurate with payments received.”
Agnes Mlambo, acting group executive for distribution at Eskom, said the company must tackle rising arrears to safeguard recent operational improvements.
“We must address the growing debt to protect the operational stability we have restored and the financial discipline we have rebuilt in the first three years of our turnaround,” Mlambo said.
Chris Ahlfeldt, energy specialist at Blue Horizon Energy Consulting Services, said the public consultation could help pressure municipalities to pay outstanding bills, but warned that supply interruptions alone will not resolve the deeper issues that caused the debt to accumulate.
“Municipal debt to Eskom has continued to grow by more than 16% per year since the treasury began its debt-relief programme in 2023, suggesting that broader structural reforms are needed in many municipalities,” Ahlfeldt said.
He added that reforms could include stronger revenue ring-fencing, greater transparency in municipal electricity accounts, and in some cases new operational models in which electricity distribution functions are managed by entities with the technical and financial capacity to keep systems financially sustainable.
Ahlfeldt also expects that, in the near term, potential supply cuts and rising electricity tariffs could accelerate demand for solar-plus-battery backup solutions among municipal customers able to afford them. However, he noted that expanding access to such solutions will require more inclusive and lower-cost financing mechanisms to ensure they align with broader energy transition goals.
Recommended News
View More
Join Us