In a major financial breakthrough aimed at stabilizing South Africa’s energy landscape, Eskom and the City of Johannesburg have officially reached a payment settlement of R3.2 billion, bringing an end to a protracted dispute that threatened electricity supply to the country’s economic hub.
The agreement, which was finalized on June 24, 2025, follows months of intense negotiations over the city’s mounting debt to the power utility.
Eskom had previously claimed that City Power—Johannesburg’s electricity distributor—owed a total of R4.9 billion, a figure disputed by the municipality.
The settlement, seen as a compromise, will see City Power repaying the agreed amount over a four-year period beginning October 2025.
Key Terms of the Agreement
Under the terms of the deal:
-
City Power will pay R3.2 billion over a structured four-year period.
-
Eskom has agreed to write off approximately R830 million in penalties, interest charges, and billing adjustments related to estimated usage during loadshedding.
-
Payments are deferred during winter months, when electricity demand typically spikes, to avoid further financial strain on the city.
Eskom welcomed the resolution, describing it as a “model settlement” that can serve as a precedent for other municipalities burdened by electricity debt.
“This agreement brings certainty and stability for Johannesburg residents and businesses while reaffirming our commitment to work collaboratively with municipalities,” said Eskom spokesperson Daphne Mokwena.
Avoiding a Power Crisis
The dispute had escalated in late 2024 when Eskom threatened to disconnect power supply to parts of Johannesburg due to non-payment.
The settlement has averted this scenario, ensuring continued energy provision and relieving the anxiety of residents and businesses alike.
The mediation process was facilitated by the South African National Energy Development Institute (SANEDI) and overseen by Minister of Electricity Kgosientsho Ramokgopa.
He praised both parties for reaching what he called a “balanced and forward-looking” solution.
“This agreement shows that even the most complex intergovernmental issues can be resolved when there is political will and a shared commitment to service delivery,” Ramokgopa noted during a press briefing.
A Blueprint for Municipal Reform?
The Eskom-City Power agreement is already being hailed as a template for resolving municipal debt challenges elsewhere in the country.
With Eskom owed over R70 billion by various municipalities nationwide, analysts suggest similar negotiated settlements could become the norm in tackling the utility’s financial instability.
City of Johannesburg Executive Mayor Kabelo Gwamanda described the settlement as a “new chapter” in the city’s energy management.
“Our objective has always been to protect residents from the threat of disconnection while ensuring that we honor our obligations. This agreement achieves that.”
Looking Ahead
While the settlement provides temporary relief, energy experts caution that sustainable solutions require broader reforms—particularly around revenue collection, infrastructure investment, and municipal accountability.
Still, the Eskom-Johannesburg deal marks a rare moment of cooperation in South Africa’s often fractious energy landscape, and for now, the lights in the country’s largest city will stay on.
Also Read
AI Boom Lifts Nvidia to Record Highs — Is a Broader Tech Rally on the Horizon?
BP Shares Climb Amid Takeover Speculation Involving Shell
