South Africa’s state-owned power utility Eskom has threatened to reduce or cut electricity supply to parts of Johannesburg after accusing the country’s biggest city of failing to pay billions of rand owed for bulk electricity purchases, reopening a politically sensitive battle that could shake confidence in Africa’s most industrialised economy.
In a sharply worded notice issued Tuesday, Eskom said the City of Johannesburg and its municipal distributor, City Power, owe a combined R6.8 billion ($408 million), including arrears of R5.25 billion and another R1.58 billion due by June 5.
The utility said repeated attempts over the past two years to help the city stabilise repayments had failed.
“As a result of continued failure to honour its Electricity Supply Agreement with Eskom, including repeated defaults, Eskom has been forced to issue a notice of its intention to reduce, interrupt and/or terminate the supply of electricity to certain bulk supply points,” the company said.
The warning lands at a delicate moment for Johannesburg, South Africa’s financial and commercial hub, which contributes roughly 16% of the country’s GDP and hosts the headquarters of major African banks, mining houses and multinational companies.
