Eskom launches legal action against 14 municipalities over R62 billion debt

Eskom has begun legal processes against 14 municipalities that have failed to pay their electricity accounts for at least 18 months.

These municipalities owe Eskom significant amounts, have failed to meet the conditions of the National Treasury Municipal Debt Relief Programme, and are now required to settle their outstanding debt.

The process will take place under the Promotion of Administrative Justice Act (PAJA), which allows affected parties to make representations before a decision is taken.

Collectively, municipalities owe Eskom around R110 billion in outstanding debt.

Eskom has previously warned that non-payment by municipalities is creating an impending financial crisis, with the 14 worst-performing municipalities owing more than R62 billion.

ASLO READ: Municipalities owing Eskom over R100bn still defaulting: Electricity Minister

Most of these municipalities are in Mpumalanga, followed by the Free State, North West, and one in the Eastern Cape.

The power utility was granted a R250 billion debt relief package by the National Treasury in 2023 to reduce its debt, but it warned that unpaid municipal bills could undermine efforts to put it on a financially sustainable path.

Under PAJA, affected parties may request written reasons and make representations before a decision is implemented.

In a statement, the utility warned that if municipalities do not urgently regularise their accounts, it may implement credit control measures, including interrupting electricity or limiting supply to levels aligned with payments received.