The National Treasury reports that additional strategies are being explored together with stakeholder departments and Eskom to address the “critical” financial situation of the top 14 Eskom defaulters.

It has been reported that arrear debt owed to Eskom by municipalities has climbed to above R80-billion, despite there being a debt relief programme in place through which debt owed to Eskom can be written off in equal annual tranches over a three-year period provided municipalities comply with set conditions.

In an update on the programme, the National Treasury reported that, between March and August 2024, compliance improved from 55% to 76%, aided by the National Treasury and the Municipal Finance Improvement Programme.

It also reported that Rand West City was the first municipality to benefit from a one-third debt write-off, following its substantial achievement of the debt-relief conditions for the first 12-month cycle.

However, it warned that slow compliance with the conditions would risk there being a delay to debt write-offs.

“Success depends on municipalities maintaining a quarterly revenue collection rate of 85%, which is below the National Treasury collection norm for local government of 95%,” The National Treasury said.

It added that municipalities were being encouraged to offer relief to indebted customers who pay current bills and transition to smart prepaid metering.