Western Cape municipalities benefit R93.1 million from Eskom debt write-off

Anton Bredell, Western Cape Minister of Local Government, Environmental Affairs and Development Planning commends Western Cape municipalities that qualified for debt write-off for money owed to Eskom. 

Matzikama Local Municipality has qualified for a R37.7 million write-off, Cederberg Local Municipality for R15 million, Kannaland Local Municipality for R14.8 million, and Beaufort West Local Municipality for R25.6 million. These amounts represent one third of their total debts owed to Eskom and afford the municipalities fiscal space to re-direct their resources to service delivery. Further gains will also be realised as the debt-relief negates the need for municipalities to pay interest amounts that would have otherwise been due on the original debt. 

As municipalities continue to honour their commitments to Eskom, they will be eligible to have the remaining two thirds of their debt written off over the next two years. The Western Cape Government will continue to work with these municipalities to assist them in improving their financial position.

Minister Bredell said the write-offs are significant for these smaller municipalities and create space for them to use their own resources to deliver tangible benefits to the communities that they serve, rather than paying off historic debts. “These four municipalities are showing what the benefits can be when you practice financial discipline. I want to congratulate them but also urge them to focus on getting the remainder of their debt written off as well.”  

Deidré Baartman, Western Cape Minister of Finance said the Eskom debt relief programme has a long list of conditions that have to be monitored monthly by the Provincial Treasury. “We have seen across the country municipalities struggling to meet the conditions of the programme. These include implementing best practices for revenue collection to ensure they can pay what they owe to suppliers, including Eskom.” 

Diligent oversight has been performed by the Provincial Treasury’s analysts, who have also provided support and advice to enable the municipalities to improve their compliance with Eskom’s conditions. 

Minister Baartman said, “The credit for this achievement is shared by the municipalities, Provincial Treasury, and National Treasury who have worked closely with Eskom to ensure that these municipalities reduce their debt. The Western Cape Government urges these municipalities to remain consistent and reliable partners throughout this debt relief process to restore their financial position and enhance service delivery across communities.”