Eskom will take over electricity billing and maintenance in three municipalities
The municipalities of Maluti-a-Phofung, Emfuleni, and Merafong have signed Distribution Agency Agreements (DAAs) under which Eskom will take over their electricity billing and maintenance.
Eskom revealed the development at a joint meeting of the Portfolio Committees on Electricity and Energy and on Corporate Governance and Traditional Affairs on Wednesday, 3 June 2026.
The municipalities — Maluti-a-Phofung, Emfuleni, and Merafong — are among 13 that received letters from the National Treasury for non-compliance with the Municipal Debt Relief programme.
Municipal debt owed to Eskom reached R114 billion by the end of March 2026, and the majority of municipalities participating in the programme are not abiding by the programme’s conditions.
The 10 other municipalities signed Council resolutions to complete Section 78 processes by September 2026 to remain within the programme.
Section 78 processes refer to the legislative consultation procedures that municipalities must follow to delegate their electricity distribution and revenue management to Eskom via a DAA.
Eskom said that four municipalities in Mpumalanga also resolved to conclude DAAs with the state power utility.
During the meeting, deputy finance minister Ashor Sarupen said municipal debt to Eskom was one of the most serious obstacles currently facing the South African government.
Eskom previously told MyBroadband that the DAA approach would enable it to assist municipalities in running their electricity businesses. It emphasised that it was not a takeover of electricity services.
“It is envisaged that the partnership will be in place for a minimum of three years until the municipal electricity operations are stabilised,” the power utility said.
“Municipalities retain their distribution licenses; Eskom becomes the agent to manage operations and collections on behalf of the municipality.”
Eskom explained that, while the DAA approach was a temporary measure, it would support municipalities across various aspects of their operations.
That included assisting with infrastructure maintenance, enhancing revenue collection, upskilling and training technical staff, and developing cost-reflective electricity tariffs.
61 municipalities consistently non-compliant
In late May 2026, finance minister Enoch Godongwana revealed that the National Treasury would start removing consistently defaulting municipalities from the Eskom debt relief programme.
He said 61 participants were consistently non-compliant with the programme’s conditions, aspects he said were directly under the control and the influence of the respective municipal councils.
They consistently failed to approve cost-reflective tariffs, address incompleteness in their rate base, enforce credit control, collect revenue efficiently, and address losses.
They had also consistently failed to enforce the free basic services policy limits. The minister said these municipalities would be provided the option to benefit from debt write-offs through DAAs with Eskom.
Through the agreements, Godongwana said Eskom would manage distribution and collection in participating municipalities for a set period.
“In terms of the proposed DAA, it is envisaged that municipalities retain their electricity licences so that, after the five years of the DAA, they can take back a stabilised service,” Godongwana said.
“The conditions for Eskom will be strengthened concurrently to force Eskom to collect from all municipalities as may be necessary.”
The minister explained that merely increasing allocations to these municipalities would be counterproductive and would not address the challenges.
“Increasing fiscal allocations is likely to result in a further weakening of their will to address their failures and will further weaken collection efforts,” Godongwana said.
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