Western Cape municipalities R93.1m Eskom debt written-off

The Western Cape government has qualified its municipalities for a debt write-off, wiping out the money they owed Eskom.

It represents one-third of the total debt the Western Cape government owes to Eskom, which affords the municipalities fiscal space to redirect their resources to service delivery.

Western Cape Minister of Local Government, Environmental Affairs and Development, Planning Anton Bredell commended the municipalities that qualified for debt write-off to Eskom.

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R93.1 million write-off

The four local municipalities qualified for R93.1 million debt write-off are:

• Matzikama Local Municipality has qualified for an R37.7 million,
• Cederberg Local Municipality for R15 million,
• Kannaland Local Municipality for R14.8 million,
• Beaufort West Local Municipality for R25.6 million.

According to Bredell, these smaller communities will benefit greatly from the write-offs.

He said they could use the money to benefit their communities instead of repaying historical obligations.

“These four municipalities are showing what the benefits can be when you practice financial discipline.

“I want to congratulate them but also urge them to focus on getting the remainder of their debt written off,” he added.

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Improving financial position

The provincial government highlights that the debt relief will yield additional benefits by eliminating the need for municipalities to pay interest on their original debt.

As municipalities continue to honour their commitments to Eskom, they will be eligible to have the remaining two-thirds of their debt written off over the next two years.

“The Western Cape Government will continue to work with these municipalities to assist them in improving their financial position,” it said.

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Municipalities struggle

Western Cape Minister of Finance Deidre Baartman emphasised that the provincial treasury will closely monitor the Eskom debt relief programme.

According to Baartman, these conditions are non-negotiable and must be adhered to to ensure the programme’s successful implementation.

“We have seen municipalities nationwide struggling to meet the programme’s conditions.

“These include implementing best practices for revenue collection to ensure they can pay what they owe to suppliers, including Eskom,” she added.

The Provincial Treasury’s analysts have diligently overseen and provided support and advice to enable the municipalities to improve their compliance with Eskom’s conditions.

“The credit for this achievement is shared by the municipalities, Provincial Treasury, and National Treasury, which have worked closely with Eskom to ensure these municipalities reduce their debt.

“The Western Cape Government urges these municipalities to remain consistent and reliable partners throughout this debt relief process to restore their financial position and enhance service delivery across communities,” Baartman concluded.

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