Read full story at source

Households and businesses in Johannesburg may have averted a blackout following threats from Eskom to reduce or cut power supply over its municipal debt, but there’s more to be worried about.

Visit turconews.click for more information.

Moneyweb has reliably learnt that Eskom has been quietly switching off streetlights in parts of the metro after power utility City Power was found to be in breach of the electricity supply agreement (ESA), once again placing the distributor in Eskom’s bad books.

Eskom cuts City Power’s SPU accounts

Eskom censured City Power over money owed in a letter addressed to its CFO dated 20 April 2026. The three-page letter, seen by Moneyweb, is a notice of disconnection for non-payment of City Power’s SPU (small power user) accounts.

The accounts, which go towards keeping the street lights on, were overdue by more than R4.1 million (at the time of the notice).

While the amount may seem small, it forms part of City of Joburg’s (CoJ) overall ballooning debt owed to Eskom.

“If you have not paid the full outstanding amount by 4 May 2026, your electricity supply will be disconnected without further notice and thereafter your ESA will be terminated,” the letter reads.

“Interest will also be levied on these accounts due to non-payment until settled in full.”

Eskom cuts Joburg streetlights

A closely placed Eskom source has confirmed to Moneyweb that a portion of some streets have already been disconnected pending payment.

The notice to City Power lists almost 100 stretches of roads in areas like Sandton, Bryanston, Fourways, Midrand, Cosmo City and Soweto.

Another reliable source at Eskom’s Gauteng cluster confirmed to Moneyweb that, as of Tuesday, R450 000 of the initial debt was still outstanding.

“There are efforts to settle the amount,” the Eskom official said.

“But we won’t switch on the streetlights until they’ve settled the full amount,” they said.

They added there’s no indication of when this will be, with the latest invoices also set to be issued soon.

Swapping out one crisis out for another

While this matter is still pending, the overall electricity debt dispute involving Joburg and Eskom has been partly resolved by way of a settlement agreement.

A two-day meeting to address CoJ’s electricity debt ended in a resolution that’s as straightforward as “continuing to pay” the debt accrued and keeping the current account up to date, as previously expected of the country’s commercial hub.

Joburg Mayor Dada Morero and City Power officials met with Eskom CEO Dan Marokane and Electricity Minister Kgosientsho Ramokgopa for a second day on Tuesday to finalise talks on a way forward on the outstanding balance.

Africa’s richest city owes Eskom more than R5.2 billion, excluding the current account of a further R1.6 billion due on 5 June 2026.

CoJ gets warned for non-payment

Eskom put the city on notice this month, warning it would reduce, interrupt or terminate the supply of electricity to certain bulk supply points against the metro and power utility City Power over its ballooning electricity debt.

This issue is separate from the SPU accounts.

While Eskom says it has been working with Johannesburg officials for over two years to support the metro in meeting its payment obligations, the city faltered at least once in its repayment schedule.

This week’s meeting yielded “no new agreement, except reaffirming the provision of the existing agreement,” Ramokgopa told journalists outside City Power’s headquarters in Reuven, in the south of the city.

2025 agreement for repayment

The existing agreement, concluded in June 2025, provides for the arrear debt owed to Eskom to be settled over four years. At the time of the initial arrangement, the debt was almost half at R3.2 billion.

In 2025, Eskom made a concession to write off R830 million accumulated over a 10-year period due to the reversal of notified maximum demand penalty exceedances, wheeling charges, estimation adjustments during load shedding, rebilling and [value-added tax] reversals. It’s understood no other concessions were made in the latest talks.

“We need to keep up to the current account and of course, find a way of servicing the debt which has now grown,” Ramokgopa said.

“Johannesburg is just too big to fail. It’s the powerhouse of the South African economy and the epicentre of financial markets across the continent,” added Ramokgopa, while assuring of a more amicable relationship between Eskom, City Power and Joburg executives.

CoJ’s R5 billion electricity debt is only a portion of the total R114 billion debt owed to Eskom by municipalities, “threatening the liquidity, solvency and going concern of Eskom”.

However, together with the city’s ‘current account obligations’ to Eskom, it owes around R6.8 billion.

Lights will stay on (inside, but not so much on the streets)

As part of the working agreement, Eskom has agreed not to cut off or interrupt power supply to the city, in what appears to be consensus that it would be unfair and punishing to paying residents and businesses to be collateral damage.

(Again, this is separate from the SPU accounts for the streetlights, which must be resolved independently.)

Part of the process is also enforcing Eskom’s Distribution Agency Agreement (DAA), which is a long-term, non-permanent, contract between a municipality or metro and the power utility.

It offers a suite of services and solutions aimed at restoring the sustainability of electricity provision in a municipality or metro, by enhancing its technical and financial sustainability.

The services include skills development and training, replacement or installation of smart meters, as well as Eskom collecting revenue on behalf of the municipality. Eskom is working nationwide to assist in the rollout of this initiative.

Going forward, Ramokgopa said a strict mechanism would be needed to secure money for electricity.

“We have already committed as part of the reform agenda that by the beginning of July there is going to be a ring-fenced account for City Power. It’s not a hostile takeover,” Ramakgopa explained.

CoJ’s financial position

Morero, who has faced mounting criticism since his appointment as Joburg mayor in 2024, continues to deny that the city is in a perpetual state of disarray or essentially broke.

This is despite being scolded by Finance Minister Enoch Godongwana over the handling of municipal finances, having the city’s debt bonds suspended on the JSE due to non-reporting, and subsequently being placed on credit downgrade watch by ratings agency Moody’s.

But he does admit that January was a bad month for the city’s revenue collection efforts, which dropped to 81% from 86% in the same month that Joburg defaulted on its debt repayments to Eskom.

Revenue collection has since bounced to 90%.

“All we need to do is to sustain the collection rate by the city and maintain it at 90%. Our losses still remain a problem, we still need to work towards reducing electricity losses that we are experiencing,” the mayor said.

“Customers can be assured that there will be no cutoffs. [We have] agreed in the meetings on what has to be done so they will have their electricity throughout,” he said on Tuesday, promising to honour the rehashed repayment agreement.

CoJ budget

The city is set to table its budget on Wednesday. Morero said it was based on an assumption of 85% revenue collection and “has been given a thumbs up by National Treasury as a funded budget”.

“If Johannesburg was broke, waste would not have been collected today, there would be no water in the entire Johannesburg because it would mean we didn’t pay our bulk purchases because there would be no electricity throughout Johannesburg.

“The fact that we can honour our commitments, even to our creditors means we are not bankrupt. “Yes, we do have challenges but we are not bankrupt,” he confidently told Moneyweb on the sidelines of the briefing on Tuesday.

This article was republished from Moneyweb. Read the original here.

Read full story at source