Johannesburg pays its R5.26 billion Eskom bill

The City of Johannesburg paid R5.26 billion it owed South African electricity utility Eskom in overdue power bills. 

City Power, the electricity-distribution company serving the nation’s biggest metro, made its final payment to the company on Friday, Eskom said in an emailed statement. 

The city “confirmed that it remains committed to the payment of all future current accounts on or before their respective due dates,” the utility said. 

In May, Eskom issued Johannesburg with a notice of its intention to reduce, interrupt, or terminate electricity supply to certain bulk points due to non-payment.

Eskom will continue to collaborate with the city “to achieve a lasting solution that safeguards the financial viability and reliability of South Africa’s electricity-supply industry,” it said. 

Municipalities owe the utility — which supplies about 85% of the country’s power — about R119 billion.

South Africa introduced measures in November that forced defaulting towns and cities into agreements that temporarily give Eskom control over local electricity operations. 

The utility has warned that deteriorating municipal finances and its ballooning debt will erode progress made through a National Treasury debt-relief program and stall a plan to unbundle the business into generation, transmission and distribution units.

The electricity regulator has allowed Eskom to raise tariffs by rates that have far exceeded inflation in recent years to help the company meet its obligations, as the government struggles to rein in non-paying municipalities.

Prices have climbed almost 900% since 2008, equating to an average annual increase of about 15%.

Eskom, meanwhile, still struggles with a net debt pile of about R346 billion.