Eskom debt: This is the situation now at Muluti-a-Phofong

Following the successful attachment of the bank account belonging to the Maluti-a-Phofung Local Municipality this week, Eskom and the
municipality on Friday reached an agreement to partially release some of the funds to assist the municipality to meet its running costs. As part of this agreement,
which has been made an order of court, the parties must conclude an agreement on or before 07 August 2020, to address the municipality’s R5.3 billion debt to
Eskom and to service its monthly current account.

The Muluti-A-Phofong Municipality includes among others Harrismith.

Eskom has agreed to release R90 million to allow the municipality to pay the salaries of its workforce and to meet other running costs. The bank account currently has a balance of more than R220 million, and was attached by Eskom on 21 July 2020 in execution of a court order granted in 2018 to help Eskom recover unpaid debt by the municipality.

The account balance will remain attached until a repayment agreement that meets Eskom’s requirements has been concluded, or until the court orders otherwise. This step on the part of Eskom is a result of the repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of
electricity.

Eskom will continue to explore all available legal avenues to ensure that outstanding municipal debt is recovered. The total outstanding municipal debt of R30.9 billion as at end June 2020
continues to threaten Eskom’s sustainability, and municipalities have a responsibility to fulfil their financial obligations for the bulk supply of electricity.