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South African Towns Owe Eskom Billions

South Africa’s top 130 municipalities could write off 8.6 billion rand ($462.8 million) of bad debt for the third quarter, hampering their ability to maintain sewerage systems and streets and pay money owed to suppliers including Eskom Holdings SOC Ltd. 
Bloomberg
By Bloomberg
14 Dec
Nonku-JoburgCityPower Electricity power lines above shacks in Alexandra, Johannesburg, South Africa, on Thursday, June 8, 2023. Power cuts, which began in 2008, have hobbled South Africa’s economy and weakened the rand.

Total debt impairments for these metropolitan, district and city councils rose 33% in the three months through Sept. 30 from the second quarter and more than doubled from a year earlier, according to data released by Statistics South Africa on Thursday.

South African Councils Are Owed Billions of Rand in Bad Debt | Impaired debt is unlikely to be paid in full

South African city councils struggle to collect payments for services and were owed 306.7 billion rand by consumers by the end of September, Treasury data showed last week. In turn, municipalities’ arrears to Eskom rose to 70 billion rand, from 58.5 billion rand six months earlier, adding to the embattled state-owned power utility’s cash-flow problems.

Read More About Municipalities’ Financial Problems

As part of the debt-relief package that the National Treasury announced for Eskom in February, the utility will write off some municipalities’ debt to improve its balance sheet.

“Non-payment of municipal debt remains a systemic challenge,” Eskom said in its interim results statement on Wednesday.

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