Emfuleni Municipality Pushes for New Eskom Debt Relief Amid Ongoing Financial Crisis
The Emfuleni Local Municipality (ELM), located in the heart of Gauteng’s Vaal region, continues to grapple with a staggering debt owed to the national power utility, Eskom. The municipality is once again seeking partial forgiveness of its growing arrears, hoping to lighten its financial burden and stabilize electricity delivery.
Emfuleni’s debt to Eskom has ballooned over the years. It reached an alarming R8 billion by late 2024, accounting for approximately 10% of the total municipal arrears across South Africa.
Efforts for adressing the setbacks
Efforts to address this mounting debt have been complex and fraught with setbacks. In late 2024, Eskom obtained a court order that allowed it to freeze four of the municipality’s bank accounts. This measure ensured that any revenue collected for electricity would be redirected straight to Eskom, bypassing ELM’s compromised financial systems.
However, before this intervention took full effect, a temporary agreement was brokered. Operations within Emfuleni resumed when a distribution agency arrangement was struck, allowing Eskom to act on behalf of the municipality in managing electricity supply and ensuring revenue collection. This stepped-in management improved service levels and brought some financial breathing space.
By December 2024, Emfuleni had met around 86% of the criteria set by the National Treasury’s debt relief program, criteria that included smart meter rollouts, structured revenue collection, and operational discipline. As a result, nearly R2 billion of its Eskom debt was erased, reducing the outstanding amount to below R6 billion.
Despite this progress, challenges remain. By mid‑2025, audit findings revealed that most municipalities enrolled in the debt relief scheme were failing to meet its conditions, Emfuleni included. These conditions encompass timely invoice payments, funding its budget appropriately, and implementing cost-reflective tariffs. Failure to comply risks removal from the program, legal action, and further bank account seizures.
Nevertheless, Emfuleni officials remain optimistic. The municipal finance spokesperson confirmed that ELM is advancing with Treasury’s requirements and anticipates qualifying for another significant write-off in the upcoming fiscal year, provided it solidifies its current trajectory.
One of the municipality’s key operational changes has been enabling over 76 000 electricity consumers to bypass the municipality and pay Eskom directly. This step aims to secure consistent income for service delivery, though it has also diminished Emfuleni’s control over its financial flows.
Adding to the complexity, Eskom continues to warn of severe strain from escalating municipal debts nationwide. With total municipal arrears approaching R100 billion by early 2025, the viability of the debt relief program is increasingly under threat. Expanding smart meter programs and integrating broader capacity development are among the proposed solutions to halt this destabilizing trend.
Conclusion
Emfuleni Local Municipality’s pursuit of another Eskom debt write-off underscores both the persistence of its fiscal crisis and its incremental attempts at structural reform. While comprehensive compliance with Treasury’s conditions and the utility’s oversight programs offer a pathway to relief, genuine financial recovery hinges on sustained governance improvements and reliable revenue collection. The municipality’s future will depend on turning short‑term gains into long‑term sustainability, ensuring that electricity, water, and essential services can be delivered consistently to a vulnerable community.
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