Eskom to distribute power in debt-stricken South African towns

Eskom Holdings will be allowed to take over the distribution of electricity in South African municipalities that collectively owed the state utility R85.2-billion at the end of last year.

The government has offered support to local authorities that have fallen into arrears due to weak revenue generation, poor credit controls and other financial pressures.

But only 15 of 71 councils that signed up for a turnaround program have consistently met the conditions to qualify for relief from the state, including demonstrating improved debt collection.

“To protect the national grid and municipal validity, government will introduce Distribution Agency Agreements, under which Eskom takes over” power distribution from defaulting councils, the National Treasury said in the 2026 Budget Review, released in Cape Town on Wednesday.

“Municipalities that refuse these conditions will be removed from the program and become liable for the entirety of their debts.”

To help ensure that consumers pay for the electricity they use, the government is also backing a