Billions in electricity debt to be written-off
The City of Johannesburg has signed an MoU with Eskom to take over its consumer base in the metro, which will include absorbing billions in customer debt, reports The Citizen.
As part of the memorandum, City Power will take on Eskom’s customer debt in a deal that might culminate in a partial write-off of nearly R7bn owed by Johannesburg consumers.
This was announced on Friday by the newly elected Mayor of Johannesburg Mpho Moerane.
The deal is expected to cost the city at least R7bn unless it can negotiate a partial debt write-off, which may also be on the cards, according to Finance mayoral committee member Matshidiso Mfikoe.
Mfikoe has been a direct participant in negotiations between Eskom and the city, which will hand over the responsibility to supply power to thousands of Eskom’s customers in townships and suburbs around Johannesburg.
Mfikoe says negotiations have been going well with Eskom and the city is preparing for a public consultation process to find a solution to the debt crisis that residents will agree to.
However, the city does not have the R7bn needed to clear the debt owed by Eskom’s Johannesburg customers, primarily in Soweto.
Moerane says the MoU will guide the city in determining the true value of the debt.
Local government is also expected to reach out to the National Treasury and the Department of Co-operative Governance & Traditional Affairs for the money to fund this endeavour.
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