Notable progress as a result of ongoing dialogue has been achieved following the issuing of notices in terms of the Promotion of Administrative Justice Act (PAJA) to 14 municipalities across the country in March.
The municipalities were selected because they had not settled their accounts for at least the last 18 months, had not met the conditions of the National Treasury municipal debt relief programme, or posed a significant financial risk to Eskom.
Initiating the PAJA process ensures that Eskom complies with legal requirements while taking necessary steps to maintain the stability of the electricity supply system.
Nine municipalities have received council resolutions to sign the Distribution Agency Agreement (DAA), and engagements are ongoing on the implementation. The municipalities are: Nketoana Local Municipality, Mpofana Local Municipality, Masilonyana Local Municipality, Nala Local Municipality, Ngwathe Local Municipality, Renosternberg Local Municipality, Thembelihle Local Municipality, Govan Mbeki Local Municipality and Kgetlengrivier Local Municipality.
Eskom also recently concluded a payment arrangement with the City of Ekurhuleni, which resulted in the withdrawal of the intention to interrupt supply.
“Recovering municipal debt enables Eskom to deliver a consistent electricity supply and invest in our infrastructure, enable businesses to protect and create jobs, assist Eskom to play its part to support strategic industries to remain competitive, as well as contributing to Eskom reducing its dependence on the fiscus,” said Agnes Mlambo, acting Group Executive for Distribution.
“It is encouraging to see that somemunicipalities have already made commitments towards their debt through payment arrangements and intention to sign the Distribution Agency Agreements, where Eskom partners for a defined period, with municipalities to assist through expertise and skills transfer in areas such as billing, maintenance of electricity infrastructure and debt collection strategies. Rising municipality debt remains one of the main challenges we face as a business, and we need all hands-on deck to ensure services are paid, for the ultimate benefit of the South African economy,” added Mlambo.
Eskom also agreed to a pre-payment arrangement with Inxuba Yethemba Local Municipality, which can only pay a certain amount to purchase electricity, resulting in Eskom supplying electricity only for the amount that had been paid by the municipality.
For three municipalities: Dr Bayers Naude Local Municipality, Kai Garib Local Municipality and Mamusa Local Municipality, Eskom did not receive representations that provide a solution to continue supplying them with electricity following the PAJA notices. Eskom has since issued a final notice to interrupt electricity supply, with the interruption scheduled to commence on 08 May 2026, however the engagements remain ongoing.
Initiating the PAJA process ensures that Eskom complies with legal requirements while taking the necessary steps to maintain the stability of the electricity supply system.
Increasing municipal debt
Nationally, the outstanding debt currently stands atR111.6 billion, despite the National Treasury’s intervention through the municipal debt relief programme aimed at restoring sound financial management and repeated support mechanisms offered by Eskom.
In deciding whether to proceed with the interruption of electricity supply to municipalities, Eskom carefully considered all representations received from stakeholders within the consultation period.
Eskom takes this opportunity to convey its gratitude to all stakeholders who made submissions and those municipalities who have taken a step to pay their bulk electricity accounts.
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Vinny Lingham was an internet entrepreneur before South African venture capitalists were even investing in the internet. He emigrated to the US to pursue his business dreams and launch Yola. In 2007, he raised USD5 million. Lingham went on to found a few more internet businesses including incuBeta and Gyft, which he sold from more than R500 million. He\’s currently working on his latest business Civic, which is an identity protection and management start-up. Vinny Lingham put his weight behind the Silicon Cape Initiative, to increase South Africa\’s global competitiveness and place the Cape on the global entrepreneurial map. He went on to become one of the \”dragons\’ on the South African edition of Dragons\’ Den, as well as one of the \”sharks\’ on M-Net\’s Shark Tank.