Eskom debt owed by municipalities to be written off in three years

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Finance Minister Enoch Godongwana says nearly 70 applications from municipalities have been received requesting that their Eskom debt be written-off.

Those that have been approved have a combined debt totaling more than R56 billion.

He was tabling the Medium Term Budget Policy Statement (MTBPS) in Parliament.

Finance Minister Enoch Godongwana tables his MTBPS

Godongwana says the Eskom debt owed by municipalities will be written off over a three-year period in equal annual trenches.

He however says there are conditions set which include enforcing strict credit controls, enhanced revenue collection, up to date payment of Eskom current accounts.

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

Meanwhile, Godongwana says the country’s electricity system will improve in the medium term.

This as the system is currently undergoing enormous positive transformation.

Godongwana says government recognises that many who rely on Eskom have been faced with disruptions and has caused a great loss for most.

He says it is for this reason that government is assisting the power utility with its finances and fixing its power stations.

In February, Eskom was granted R254 billion debt relief to ease the pressure on its financials.

The debt relief came with conditions that Eskom needs to comply with and the grant has since been amended.