Municipalities owe Eskom more than R110 billion and the alarm bells are ringing

Eskom faces mounting pressure as municipal debt crisis escalates, prompting parliamentary action.

South Africa’s municipal electricity debt crisis has surged past R110 billion, prompting Parliament’s Portfolio Committees on Cooperative Governance and Traditional Affairs (COGTA) and Electricity and Energy to call for urgent inter-ministerial intervention to stabilise distressed municipalities and prevent further strain on Eskom’s finances.

The committees expressed concern on Wednesday following briefings from the Department of Electricity and Energy, Eskom, the Department of Cooperative Governance and Traditional Affairs, the South African Local Government Association, and National Treasury on the implementation of Distribution Agency Agreements (DAAs) between Eskom and municipalities.

According to the committees, municipal debt owed to Eskom has escalated from R89 billion previously reported to more than R110 billion, a sharp increase that Parliament warn could reverse progress made in stabilising the power utility.

Chairperson of the Portfolio Committee on Electricity and Energy, Ms Zama Khanyase, said the growing debt poses a serious threat to Eskom’s recovery efforts.