HomeIndustry SectorsFinance and PolicyEskom: three municipalities left to pay debt or face power cut

Eskom: three municipalities left to pay debt or face power cut

On Friday, Eskom was pleased to announce that the number of indebted municipalities to the power utility was now down from twenty to three.

Eskom tweeted on Friday afternoon: “All but 3 of the top 20 defaulting municipalities have settled their debt with Eskom.”

Bulk electricity interruption

Eskom warned that the remainder three municipalities will face having their power cut on 5 June 2015 should they not submit a payment proposal.

The power utility followed with another tweet: “Some of the defaulting munics have paid part of their debt to Eskom, and made arrangements to settle the balance going forward.”

This follows a public announcement which the parastatal made on 10 April 2015 where they issued a name and shame list of the top 20 defaulting municipalities who were indebted to Eskom by a combined total of ZAR3.68 billion ($329 million) for the bulk supply of electricity.

Recouping funds

With winter on our doorsteps these payments have come at a time when the utility is strap for cash. Eskom has been battling to meet the increasing demand due to aging infrastructure, diminishing base-load reserves, frequent technical faults and delayed progress in its coal fired peaking power plants.

At the end of April, Eskom released another announcement stating that ten municipalities had signed payment agreements with the utility, amounting to a total of ZAR54 million ($4.4 million).

Power security with consistent payment

Eskom assured the ten munis that they would be exempt from the June bulk electricity interruptions.

However, Eskom stressed that municipalities have to comply consistently with payment agreement terms on a monthly basis. If these conditions are not met, interruptions of supply will be implemented without further notice.

Eskom acting chief executive Brian Molefe said in April: “Eskom has reached a point where it can no longer continue to provide power without receiving payment in return. We are pleased that these 10 municipalities are doing their bit to ensure that they reduce the debt owed to Eskom and we encourage all defaulting municipalities to do the same.”

Nicolette Pombo-van Zyl
Nicolette is the Editor of ESI Africa print journal, ESI-Africa.com and the annual African Power & Energy Elites. She is passionate about placing African countries on the international stage and is driven by the motto "The only way to predict the future is to create it". Join her in creating a sustainable future through articles and multimedia content.