Johannesburg clears R5.25bn Eskom debt in full, averting threat to power supply

The City of Johannesburg has fully settled its R5.25 billion electricity debt to Eskom, resolving a long-standing dispute that had raised concerns about the stability of power supply to South Africa’s largest city. The final payment was made on Friday, clearing all outstanding amounts owed by the City of Johannesburg and its electricity distribution arm, City Power. According to officials, the total overdue sum was R5,255,421,994.16, which has now been reduced to zero following the transaction. The resolution came after months of negotiations facilitated by Electricity and Energy Minister Kgosientsho Ramokgopa. The minister led an intervention and mediation process that brought together the City of Johannesburg, City Power, and Eskom to address the billing disputes that had persisted for years. This effort culminated in a deal that saw Eskom withdraw its legal action under the Promotion of Administrative Justice Act (PAJA), which had been initiated on 17 May 2026 over the unpaid arrears. Minister Ramokgopa expressed satisfaction with the outcome, stating that the settlement underscored the importance of intergovernmental collaboration. He praised the structured engagement between the parties, which he said had protected the continuity of electricity supply while addressing the financial challenges faced by Eskom. “This resolution reinforces the effectiveness of the Inter-Governmental Relations (IGR) model we have championed,” Ramokgopa said. He added that the ongoing dialogue and formation of a dedicated task team had ensured that both the residents and businesses of Johannesburg continued to receive uninterrupted power, even amid financial constraints. Executive Mayor Dada Morero hailed the payment as a crucial step toward strengthening the city’s financial health and governance practices. He emphasized that settling the debt reflected the City’s dedication to fulfilling its financial commitments and avoiding potential disruptions to the electricity grid. “This is a significant milestone in the City's journey towards financial sustainability and responsible governance,” Morero stated. He outlined the city’s plans to maintain timely payments for future electricity bills, reduce losses caused by electricity theft and vandalism, and invest in essential infrastructure to enhance reliability. Eskom, the state-owned electricity provider, had previously warned that failure to settle the debt could lead to load-shedding in parts of Johannesburg. However, with the final payment processed, the risk of such measures has been eliminated. Eskom confirmed that the PAJA application, which had been filed to compel the city to pay its outstanding balance, would no longer proceed. The company did not immediately comment on the specifics of the agreement reached with the City of Johannesburg. The settlement comes at a time when both the City of Johannesburg and Eskom face considerable financial pressure. The city has been grappling with budget constraints and rising operational costs, while Eskom continues to deal with systemic issues including aging infrastructure and funding shortages. Despite these challenges, the resolution of the debt dispute marks a positive development in the relationship between local and national authorities regarding energy management. The City of Johannesburg has pledged to ensure that future electricity accounts are paid promptly, emphasizing the need for consistent financial discipline. Officials indicated that they will work closely with Eskom to develop strategies aimed at improving the efficiency and resilience of the city’s power network. These efforts are part of a broader initiative to secure a more stable and sustainable energy future for Johannesburg’s residents and businesses. The successful negotiation highlights the role of government coordination in resolving complex fiscal disputes. It also sets a precedent for how similar conflicts might be addressed in other municipalities across the country. With the immediate threat to power supply removed, attention can now shift to long-term planning and investment in infrastructure to support continued growth and development in one of South Africa’s key economic centers.