Eskom’s Chief Financial Officer, Calib Cassim, has issued a stark warning that municipal arrear debt owed to the utility could exceed R300 billion by 2030. This statement was made during the group’s results presentation, where Cassim highlighted the failure of the National Treasury’s current initiatives to address the escalating crisis.
As of March 31, 2025, municipal debt owed to Eskom had surged by 27% to R94.6 billion, and has since surpassed R103 billion. Cassim emphasized that if this trend continues, the arrears could significantly outweigh the R230 billion in debt relief provided by the National Treasury.
Eskom reiterated that the municipal debt relief program has not been effective in curbing the rise in arrear debt. Under this program, municipalities can write off legacy debt if they adhere to specific conditions, such as keeping their current accounts with Eskom up to date.
The utility also warned that without innovative solutions, the financial sustainability of the upcoming National Electricity Distribution Company of South Africa could be at risk, potentially affecting Eskom Generation and the National Transmission Company.
Eskom and the government are exploring alternative solutions, including distribution agency agreements (DAAs) and prepaid supply models. Cassim argued that DAAs would help municipalities deliver sustainable local services while improving Eskom’s financial health through better billing and revenue collection.
Fanele Mondi, CEO of the Energy Intensive Users Group (EIUG), identified municipal debt as a significant threat to Eskom’s financial stability. He noted that this debt could escalate to R135 billion during the current financial year, marking a 43% increase from the prior year. Between 2015 and 2025, municipal debt ballooned from R5 billion to R94.6 billion, representing an increase of over 1,800%.
Mondi stressed the urgency for the government and stakeholders to intensify efforts to support Eskom in managing this debt burden, as its financial instability has direct repercussions for consumers and the broader economy.
Additionally, Eskom reported that 14.9 TWh of electricity was lost to theft in the 2025 financial year, equating to a financial impact of R28 billion, up from R23 billion in 2024. To combat these losses, Eskom plans to roll out 7.2 million smart meters and accelerate the implementation of a new online vending system for prepaid tokens, following significant fraud in the current system.