Free State municipalities’ electricity debt crippling service delivery programme: Eskom

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Cash-strapped Eskom says Free State municipalities’ rising electricity debt is crippling its power utility’s service delivery programme.

Eskom has revealed that 16 municipalities, including the Mangaung Metro, have had a joint debt of R16 billion since the end of February.

The top three municipalities, Maluti-A-Phofung, Matjhabeng and Ngwathe, are leading with a joint debt of over R12 billion.

Eskom says the three municipalities consume energy valued at R200 million on average monthly.

Eskom’s Agnes Mlambo, says municipalities receive government grants but still fail to service their electricity debt.

Budget speech

During the Budget Speech, Finance Minister Enoch Godongwana said the government will keep its commitment to support Eskom. “To date, Eskom has been provided with R136 billion to pay off its debt with a further R88 billion until 2025/26. We acknowledge, however, that Eskom is faced with a large amount of debt that remains a challenge to service without assistance. The National Treasury is working on a sustainable solution to deal with Eskom’s debt in a manner that is equitable and fair to all stakeholders.”

“Any solution will be contingent on continued progress to reform South Africa’s electricity sector and Eskom’s own progress on its turnaround plan and its restructuring. We expect Eskom to take further steps towards cost containment, conclude the sale of assets and implement operational improvements to enhance the reliability of electricity supply, ” Godongwana said.

Treasury working on a solution to deal with Eskom debt: