60-plus municipalities cannot pay their electricity bills

  • Finance Minister Enoch Godongwana has confirmed that 67 municipalities have applied for Eskom debt relief as they’re unable to pay their electricity bills.
  • The applications currently total R56.8 billion in debt owed to the power utility.
  • Of the 67 applications, 28 have been approved, with the remainder still to be assessed.

Yesterday Finance Minister Enoch Godongwana delivered his Medium Term Budget Policy Statement (MTBPS), with the country’s rising debt against the backdrop of slowing economic growth being one of the key talking points.

On the subject of debt, several dozen municipalities are simply unable to pay their electricity bills, with Godongwana confirming that 67 applications have been submitted under government’s Eskom debt relief arrangement announced earlier this year.

“By October 2023, 67 applications had been submitted, totaling R56.8 billion or 97% of total municipal debt owed to Eskom at end-March 2023,” Godongwana highlighted, per SA News. Of the 67 applications, 28 have been approved, the minister confirmed, with the remainder still to be assessed by the relevant stakeholders.

The aforementioned debt relief bill makes an allowance for R254 billion by government to assist ailing municipalities that simply cannot pay their electricity bills.

“The debt…will be written off over a three-year period, in equal annual tranches. This is provided the municipality complies with set conditions. These conditions include enforcing strict credit controls, enhanced revenue collection [and] up-to-date payment of Eskom monthly current account,” the minister explained.

“As at 30 September 2023, government has disbursed R16 billion of the R78 billion debt relief for 2023/24. A task team has been established with officials from the National Treasury, the Department of Public Enterprises and Eskom to monitor compliance with the conditions and report quarterly on whether Eskom qualifies for the conversion of the loan to equity,” he continued.

With government now stepping in, and taxpayers having to bear the brunt of the cost of the Eskom debt relief, it remains to be seen what will happen with the underperforming power utility should all unpaid electricity bills be taken care of and it can no longer cry foul regarding a lack of revenue from municipalities.

[Image – Photo by Nikola Johnny Mirkovic on Unsplash]


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