City Power and Eskom have reached a settlement of R3.2bn over a contentious bill that threatened to plunge SA’s economic and financial hub into darkness, as Eskom threatened to pull the plug on supplying the metro with electricity.
The agreement comes after Eskom issued a notice in November, threatening to cut power supply to Johannesburg, home to Africa’s largest stock market and regional headquarters of many multinational companies, over a contentious R4.9bn bill it said City Power owed.
This spurred electricity minister Kgosientsho Ramokgopa to intervene, with City Power subsequently agreeing to pay R1.4bn to Eskom.
The remaining amount, which was in dispute, was subjected to an independent evaluation to iron out billing discrepancies between Eskom and City Power. The SA National Energy Development Institute (Sanedi) was tasked to lead a technical assessment to determine the accurate amount owed.
In a media briefing on Tuesday, Ramokgopa said City Power and Eskom had reached settlement of R3.2bn that City Power would pay over four years; however, “There will be relief in payment of that R3.2bn. We have R830m written off [so] that R3.8bn is less the R830m, and that’s a concession that Eskom has made. The expectation now is that City Power continues to maintain the current account,” the minister said.
Johannesburg executive mayor Dada Morero said: “We are happy with the settlement as outlined by the minister. Both entities — City Power and Eskom — are happy. Now it’s a matter of implementing the agreement.”
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 over 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.
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