Eskom’s hard-won recovery tested by cities owing billions

A turnaround in the finances of South Africa’s Eskom Holdings has won praise from investors but they are keeping their eyes on one issue — the company’s struggle to recoup about R95-billion in unpaid electricity bills from cities and towns across the country.

It’s a debt pile that continues to mount as municipalities themselves fall behind in collecting revenue from customers.

With 95.4-billion owed as of November, the arrears could jeopardise Eskom’s plans to spin off its distribution unit, a move that it says is key to boosting efficiency and securing investment.

It could also put at risk investors’ new-found goodwill toward a company that was seen as symbol of chronic dysfunction but is now about to turn its first profit in nearly a decade.

Blamed for years of rolling electricity blackouts, it’s managed to keep the lights on for nine months in a row, offering hope to the power-starved