Minister Ramokgopa outlines Eskom's strategies to recover R100 billion municipal debt

Minister of Electricity and Energy Kgosientsho Ramokgopa says power utility, Eskom, is using various strategies to recoup more than R100 billion owed to it by municipalities.

Responding to parliamentary questions from ANC MP Nonkosi Mvana, Ramokgopa stated that the total municipal debt as of September 30, 2025, was R105 billion.

“Eskom is employing a range of strategies aimed at proactively improving municipal payment performance and doing all that is within its control and ability to arrest the debt growth,” he said.

Ramokgopa said Eskom was actively partnering with defaulting municipalities through the implementation of the Distribution Agency Agreement (DAA).

“Eskom introduced the Distribution Agency Agreement, designed to support municipalities in managing their electricity operations more effectively by improving operational efficiency and revenue collection.

“This involves Eskom providing its teams to engage in skills transfer and capacitation so the municipality can build a sustainable electricity distribution function.”

He said the main feature of the DAA was that it ensured the municipality's electricity business was fully ring-fenced, with billing and revenue collection conducted by Eskom, and all profits from electricity sales paid over to the municipality.

“Currently, this process is voluntary. However, to reap the full benefits of this programme, Eskom is advocating that it should be made mandatory for defaulting municipalities.”

There are currently two DAAs in place at Maluti-a-Phofung and Emfuleni, which were concluded through court processes.

Ramokgopa also said Eskom was working with the National Treasury to support municipalities, including the National Treasury Debt Relief Programme.

“This programme has seen limited success with only 10 of the 71 municipalities fully compliant with the conditions as at September 30, 2025.

“Since March 2023, the total overdue debt for the participating municipalities has grown by R35 billion.”

He said legal intervention against municipalities will be considered, including limitation of supply to the municipality’s affordability and disconnections as a last resort.

The minister stated that in response to government support to municipalities, 71 municipalities were approved for the Debt Relief Programme by the National Treasury.

”As at September 30, 2025, 10 municipalities were fully compliant in paying their current account on time, and six municipalities had one or two current accounts that were overdue.”

He said 13 municipalities have received their one-third write-off of the ring-fenced debt totalling R634 million, and another 11 applications were in the process of approval.

“However, the majority of municipalities will not receive write-offs, as they are not compliant with the National Treasury’s conditions, as evidenced by the significant debt growth,” said Ramokgopa.

mayibongwe.maqhina@inl.co.za