Municipal debt to Eskom could explode to R358 billion by 2031, Ramokgopa warns - IOL
Electricity and Energy Minister Kgosientsho Ramokgopa has warned that municipal debt owed to Eskom could rise sharply to R358 billion by 2031.
Minister of Electricity and Energy Kgosientsho Ramokgopa has warned that municipal debt to Eskom could balloon to R358 billion by 2031 if urgent action is not taken.
Municipalities currently owe the utility R120.26 billion in overdue debt, with 83 municipalities subject to Eskom’s formal debt-recovery processes. IOL previously reported that Finance Minister Enoch Godongwana has revealed that 50 of 71 municipalities participating in the Municipal Debt Relief Programme have failed to pay their current accounts to Eskom as at last month.
The affected municipalities owed the power utility a combined R40.5 billion, a combination of debt incurred from the time they were part of the Municipal Debt Relief Programme that was introduced in 2023.
Ramokgopa said municipal debt posed a major threat to Eskom’s financial sustainability, with the utility warning that continued non-payment was putting further pressure on its finances.
"Municipal debt remains the single greatest threat to Eskom’s financial sustainability. Eskom projects the debt to rise to R358 billion by Financial Year (FY) 2031 if decisive intervention is not implemented," Ramokgopa said.
He added that Eskom had implemented several measures to improve payment by municipalities, strengthen revenue collection and prevent further debt from accumulating.
These include Distribution Agency Agreements, payment arrangements, targeted debt concessions and closer collaboration with National Treasury through the Municipal Debt Relief Programme.
"Eskom further reported in its FY2026 results issued on Monday, 31 August 2026, that the non- payment of municipal, metro and residential accounts continued to constrain its financial performance, with a net amount of R15.8 billion (around 4.5% of revenue) not recognised as revenue due to the elevated risk of non-collectability (FY2025: R11.9 billion)."
Eskom said only 10 of the 71 municipalities enrolled in the Municipal Debt Relief Programme were fully complying with the requirement to settle their current accounts in full each month.
The utility has also entered into Distribution Agency Agreements with some defaulting municipalities, allowing it to manage billing and revenue collection while providing technical support to strengthen municipal electricity operations.
