Eskom says it has not processed any debt write-offs

Eskom says it has not processed any debt write-offs for either residents or municipalities.

This comes after Gauteng premier and ANC chairperson Panyaza Lesufi told a community gathering that “all” historical debt owed to Eskom had been scrapped.

In a video circulating on social media, Lesufi told residents: “We are happy that national government has agreed that all the people owing Eskom for years – all those debts have now been scrapped.

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“We have championed that and we’re starting on a new slate, all of us. We are encouraging all municipalities that are run by the ANC to do the same and scrap the debt of everyone. We are serious about winning this election, very serious.”

Eskom on debt relief

On Thursday, Eskom said it has not processed any debt write-offs at this stage as the Municipal Debt Relief has conditions that the municipalities must fulfill over the next three years.

The Municipal Debt Relief was reiterated by Deputy President Paul Mashatile during his maiden oral replies in the National Assembly in March.

“As outlined in the budget speech in February this year, the National Treasury is working with Eskom to provide a sustainable solution to the crisis of municipal debt,” said Mashatile.

@Eskom_SA municipal arrears debt has been scrapped, according to @Lesufi

Eskom revealed recently that the municipal arrears debt figure had risen to above R65 billion by July. pic.twitter.com/L2mfZ2TPRu

— Engineer Matšhela Koko, MBL (@koko_matshela) November 28, 2023

“It is clear that we need a debt relief strategy that will acknowledge the inherent risks of unviable municipalities.”

He said Eskom would provide incentivised relief to municipalities whose debt is unaffordable. However, the relief would come with conditions that will ensure there is no repeat of debt build-up over time.

Some of the conditions will include the installation of prepaid meters to correct non-payment and operational practices in the affected municipalities, said Mashatile.

On Thursday, Eskom said as at end of March 2023, arrear municipal debt was at R58.5 billion, a 30% year-on-year increase from R44.7 billion in March 2022.

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The top 20 defaulting municipalities account for about 78% of total arrear municipal debt. Eskom continues to make efforts to address the arrear debt, however, these have not yielded the desired outcome as the debt continues to escalate.

Municipal Debt Relief programme

The power utility said it had not processed any debt write-offs at this stage as none of the municipalities had met the conditions.

“Eskom would be required to process the first portion of debt write-off only after municipalities have met the set conditions to the satisfaction of National Treasury, for 12 consecutive months,” it said.

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According to Eskom, a majority of municipalities have applied to National Treasury for the debt relief. Fifty-two (52) of these municipalities have received approval from National Treasury, with six municipalities granted conditional approvals.

The Municipal Debt Relief is also applicable to municipalities and does not include any other customer categories, it said.

“Eskom has mechanisms in place to assist its direct residential customers facing challenges in settling their accounts in full,” it said.

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“Payment for services is critical for the sustainability of any service provider including Eskom, therefore, Eskom urges all South Africans to pay for services they consume.”

The Citizen asked premier Lesufi to respond to Eskom’s statement but did not immediately receive feedback. His comments will be added once received.