Parliament Demands Intergovernmental Action Plan on R110bn Municipal Eskom Debt

Posted 04 June 2026 Written by Acts Online
Category Energy

Brought to you by SAnews: Parliament’s Portfolio Committees on Cooperative Governance and Traditional Affairs and on Electricity and Energy have resolved to establish an inter-ministerial committee to address systemic municipal financial distress and escalating debt owed to Eskom, which has now exceeded R110 billion.

In terms of the Constitution of the Republic of South Africa, 1996, municipalities hold constitutional authority over electricity reticulation. However, during a joint committee meeting, the portfolio committees highlighted that this authority does not exempt municipalities from financial accountability or allow the diversion of funds intended for electricity services. The committees reviewed the implementation of Distribution Agency Agreements (DAAs) entered into between Eskom and various municipalities under the regulatory oversight of the Department of Cooperative Governance and Traditional Affairs (COGTA), the Department of Electricity and Energy, and the National Treasury.

The joint committees noted that municipal debt owed to Eskom has escalated from R89 billion to over R110 billion. To curb this, stakeholders have been given a three-month deadline to present a concrete intergovernmental action plan. The plan must address:

  • The implementation and monitoring of Distribution Agency Agreements (DAAs);
  • The correction of municipal governance failures, corruption, and financial dysfunction;
  • The improvement of municipal billing systems and revenue collection mechanisms;
  • The updating of municipal indigent registers to safeguard free basic electricity allocations; and
  • The enhancement of credit control measures and debt collection from end-consumers.

Additionally, the committees noted ongoing regulatory and policy reform processes, including the review of the national electricity pricing policy and the draft White Paper on Local Government, which aim to address structural municipal challenges over the longer term.

What this means for you, your business, or your clients

  • For yourself: No direct individual compliance obligations; however, professionals residing in financially distressed municipalities should monitor local credit control policies and billing accuracy.
  • For your business: Commercial operations relying on municipal electricity reticulation should prepare for stricter credit control, potential tariff adjustments under the pricing policy review, and aggressive municipal revenue collection enforcement.
  • For your clients: Corporate and municipal clients must audit their electricity billing, ensure compliance with local credit control bylaws, and, where applicable, review the legal and operational implications of Distribution Agency Agreements (DAAs) on their local supply security.

Originally published at https://www.sanews.gov.za/south-africa/committees-support-plan-tackle-municipal-debt-owed-eskom

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