By Charles Molele
The City of Tshwane has secured a five-year payment agreement with Eskom to settle its R6.67 billion historical debt, a move hailed as a milestone in the city’s financial recovery.
The agreement, formalised as a court order on November 26, 2024, includes critical measures to stabilize the city’s strained finances while ensuring continued service delivery.
Tshwane nayor Dr. Nasipi Moya announced the agreement during a media briefing at Tshwane House, Pretoria.
“Today, however, I am pleased to announce that the City of Tshwane has reached a landmark agreement with Eskom to settle this issue. This agreement, formalised as a court order on 26 November 2024, is a significant milestone in our journey to financial recovery and stability,” said Moya.
“When we took office, the Eskom debt stood at over R7 billion, having ballooned from R2.9 billion in just 18 months, with over R700 million in accrued interest … This has placed immense strain on the city’s financial sustainability as we have struggled to meet our current obligations to Eskom while trying to reduce the debt and pay the interest that was accruing.”
Under the agreement, Tshwane’s historical debt will be ringfenced and repaid over five years, with the first installment of R400 million due in December 2024 and the final payment scheduled for March 2029.
Eskom has agreed to waive interest on the outstanding amount, provided Tshwane meets its current payment obligations within 30 days of billing.
“This is achievable thanks to improved revenue collection efforts,” Moya said, adding that the city will prioritise revenue protection measures to ensure all paying residents meet their obligations.
The settlement averts prolonged litigation and allows Tshwane to focus on enhancing service delivery and strengthening its revenue systems. Moya extended gratitude to Eskom and Energy Minister Dr. Kgosientsho Ramokgopa for their roles in brokering the agreement.
“This settlement signals a turning point as it allows us to turn our focus towards improving service delivery and enhancing revenue collection systems,” sad Moya.
“On behalf of the Mayoral Committee, the City, and the residents of Tshwane I would like to thank Eskom as well as the Minister of Energy and Electricity, Dr Kgosientsho Ramokgopa, for the support in reaching an agreement that allowed us to avoid a potentially devastating outcome had we proceeded with litigation.”
“This agreement is a demonstration of what is possible when the City works together with all spheres of government in the collective interest of residents.”
Eskom said on Monday night that it was pleased to announce that the City of Tshwane has signed a payment arrangement plan to settle th debt owed to the power utility.
Eskom also said that the payment arrangement is subject to the following condition: if the City of Tshwane defaults on the agreed payment plan or its current accounts, the arrangement will be terminated, and the full outstanding amount will become immediately payable.
“We are pleased to have worked collaboratively with the City of Tshwane to reach this outcome,” said Monde Bala, Eskom Group Executive, Distribution.
“This agreement plays a part in maintaining the sustainability of Eskom to drive the economic growth of South Africa and reduce our burden on the taxpayer,” he continued.
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