Out of 72 municipality applications for State-owned Eskom debt relief, 70 have been approved, Finance Minister Enoch Godongwana revealed in his 2024 Budget on February 21.

The 72 applicants represent R56.7-billion, or 96.9%, of the total municipal debt owed to Eskom as at March 31, 2023, with the 70 approved representing R55.2-billion.

National government had previously invited municipalities to apply for debt relief for arrears debt to Eskom. However, for the debt to be written off in three equal yearly tranches, applying municipalities needed to comply with set conditions. These conditions include the enforcement of strict credit controls, the payment of monthly electricity accounts, and the enhancement of revenue collection.

The 2024 Budget introduced amendments to conditional grant frameworks to improve service delivery and address financial pressures in municipalities.

Godongwana also announced the creation of a new conditional grant, distributed by National Treasury, to fund the rollout of smart prepaid meters. This will initially be rolled out in municipalities that have been approved for Eskom debt relief.

A total of R2-billion has been allocated for the grant, made up of R500-million in the 2024/25 fiscal year, R650-million in 2025/26 and R800-million in 2026/27.

“Sadly, an unacceptable number of [municipalities] are experiencing weaknesses in governance, financial management, and service delivery.  To address these challenges, and to transform municipalities into engines of growth, we have adopted a multi-pronged approach. It focuses on tightening budget processes, ramping up oversight, increasing the skills and capacity of municipal employees, and driving investment in maintaining and building infrastructure,” Godongwana said.