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The overdue amount owed to the utility has quadrupled over the last five years. This frustrates efforts to stabilize its finances just as it is making progress in improving its operations and averting blackouts that have dogged the country for years.
South African municipalities owe Eskom a total of R82.3 billion (US$4.5 billion) in arrears. This has put the embattled state power utility in a tight spot. Eskom supplies electricity to the municipalities, which in turn sell it to households and businesses. Both have seen a rapid rise in outstanding debts.
The overdue amount owed to the utility has quadrupled over the last five years. This frustrates efforts to stabilize its finances just as it is making progress in improving its operations and averting blackouts that have dogged the country for years.
Ekom has resorted to a range of methods to collect its debts, including securing asset seizure orders. In 2020, it publicized how furniture and vehicles owed by the Emfuleni municipality, one of its biggest creditors, were taken.
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To improve revenue collection, Eskom developed a debt-management strategy, with one of the key interventions being to enter into partnerships with municipal customers to actively help them settle their debts, the utility said in a reply to questions. Only five councils have entered into settlement agreements to date, it said. Among the top debtors are: Emalahleni (Rand 8.9 billion), Maluti A Phofung (Rand 8 Billion), and Emfuleni (Rand 7 Billion)
