Johannesburg metro’s power entity, City Power, has agreed to pay a portion of the contentious R4.9bn it owes Eskom, allaying fears that imminent power outages in SA’s economic and financial hub would stifle business, thanks to electricity minister Kgosientsho Ramokgopa’s intervention on Monday.
Ramokgopa’s intervention came four days after Eskom warned City Power that it intended to cut power over unpaid electricity bills, triggering anxiety among residents and businesses alike, and launching the minister into action.
Ramokgopa arranged a meeting with City of Joburg officials, at which parties agreed on principles, ensuring there would be no electricity supply disruptions to Johannesburg, home to Africa’s largest stock market and regional headquarters of many multinational companies.
City Power agreed to pay R1.4bn to Eskom due at the end of the month. The remaining amount, which is in dispute, would be subjected to an independent evaluation to iron out billing discrepancies between Eskom and City Power.
“The notice has been withdrawn. [Joburg metro] will pay the current account as we resolve the issues,” Ramokgopa said, referring to Eskom’s notice to cut off the City of Johannesburg from electricity supply.
Ramokgopa said the SA National Energy Development Institute would lead a technical assessment to determine the accurate amount owed.
“There is no crisis loading ... there had been some degree of unease and trepidation, business had some apprehension on possible implications of Eskom switching off Joburg,” Ramokgopa said.
The City of Johannesburg’s saga is part of the wider municipal debt crisis faced by Eskom, which has had a staggering 18-fold jump to almost R90bn in unpaid electricity bills since 2015 from municipalities across the country.
Eskom, choking under a R400bn debt burden, received a R254bn debt relief package over three years from the Treasury in 2023 in a programme that enjoined municipalities to pay their dues to Eskom.
Ramokgopa said many municipalities were facing a cash crunch as a result of the socioeconomic crises the economy was grappling with. As a result, he said, Eskom’s going concern was under “tremendous risk” and if the power utility did not maintain its fleet of generating unity it could result in another devastating bout of load-shedding.
DA Gauteng leader Solly Msimanga, said: “A serious intervention is needed at City of Joburg immediately to prevent this municipality from collapsing entirely if this is not nipped in the bud soon. The DA has already tabled questions to MEC Jacob Mamabolo on this matter to determine how they will be assisting the municipality in paying its debt to Eskom.”
Eskom has applied to the National Energy Regulator of SA for tariff increases that will net it revenue of more than R1.4-trillion for financial years 2026-28.
Eskom is seeking to generate total revenue of R446bn for 2026, R495bn for 2027 and R537bn for 2028.
The proposed average price increases for Eskom’s direct customers are 36.15% (April 1 2025 to March 31 2026), 11.81% (April 1 2026 to March 31 2027) and 9.10% (April 1 2027 to March 31 2028).
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.