The South African Government and Eskom are working together to address the issue of municipal debt owed to the power utility, which is posing a risk to its stability and the economy.
Deputy President Paul Mashatile stated that municipalities owe Eskom R56.3 billion for unpaid bulk electricity supply, a number that is increasing. He said:
“The debt is rising. It is clear that we need a debt relief strategy that will acknowledge the inherent risk of unviable municipalities. In this regard, Eskom will provide incentivised relief to municipalities whose debt is unaffordable… Municipalities must use the money they are allocated effectively and efficiently for the intended purposes. If this is not the case, there should be consequences.”
Mashatile added that the government is preparing a Municipal Finance Management Act (MFMA) circular dealing with the relief strategy regarding municipal debt owed to Eskom, which is expected to be released later this month. He also emphasized the need to discourage a culture of non-payment for public services, saying, “We cannot overemphasise the need to discourage a culture of non-payment for public services.”
Regarding Eskom’s financial challenges, Mashatile said that the government will implement debt relief of R243 billion for the power utility over the next three years. He explained:
“The debt relief of R243 billion will be implemented over the next three years. Government’s intervention of explicitly taking on this debt is aimed at reducing fiscal risks and enhancing long term fiscal sustainability… Further to this work, the government is continuing with the medium to long term plans of adding additional capacity to the grid. We are committed to clean energy solutions including investing in renewable energy solutions.”
Mashatile said that the government hopes that these measures will facilitate energy security and lead to inclusive economic growth and job creation.
