Treasury approves Eskom debt relief for 28 municipalities

67 applications have been submitted, totalling R56.8bn

Finance Minister Enoch Godongwana
Finance Minister Enoch Godongwana
Image: GCIS

The Treasury has approved the application of 28 municipalities for Eskom debt relief.

Minister Enoch Godongwana  on Wednesday said the department was reviewing and verifying dozens more applications.

"By October 2023, 67 applications had been submitted, totalling R56.8bn or 97% of total municipal debt owed to Eskom at end-March 2023. Twenty-eight applications have been approved; the remainder are being assessed and verified with provincial treasuries," said Godongwana during the mid-term budget speech in parliament.

"The ultimate goal is the profound transformation of these municipalities, by empowering them to build financial resilience, amplify their capacity to generate sustainable revenue and rekindle a culture of paying for services rendered.

"The debt-relief arrangement for Eskom outlined in the 2023 budget noted that a large proportion of outstanding municipal debt is owed to Eskom. National government has introduced support to relieve municipalities of debt to Eskom."

He said the municipalities' debt to Eskom up to March 31 would be written off over a three-year period in equal annual tranches.

"This is provided the municipality complies with set conditions. These conditions include enforcing strict credit controls, enhanced revenue collection, up-to-date payment of Eskom monthly current account," Godongwana said.

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