R800m Eskom Debt, R500,000-A-Month Deal — But Eastern Cape Council Paid Just R2,780

A small Eastern Cape local authority has repeatedly reneged on its R500 000 a month agreement with Eskom to service its R800million debt, with just R2 800 paid in one month.

A response by the Cooperative Governance and Traditional Affairs MEC Zolile Williams to DA MPL Heinrich Müller, states that the Inxuba Yethemba Municipality (IYM) had also agreed to pay R1m a month whenever the municipality has excess funds. The agreement was signed on May 6, 2025 by municipal manager, Mkhululi Mbebe. The municipality has nine wards and two towns, Inxuba (formerly Cradock) and Middelburg.

Asked to give the current total amount owed, total arrears and age analysis, Williams said the total amount owed was R799 777 517 as of August 2025. The age analysis of the debt was reported as:

• 60 days: R23 049 709;
• 90 days: R18 205 735; and
• 120 days: R734 299 289.

“Cooperation agreement was signed by Eskom on the 25th April 2025, Friday. The municipal manager signed the agreement on 06 May 2025. The new agreement stipulates that IYM will be paying R500 000 on a monthly basis towards the arrear debt with aspiration of paying R1 million on a monthly basis whenever the municipality has excess funds. A payment of R1m on each account was made in July 2025 upon receipt of the first Equitable Share tranche, due to financial constraints the month repayment arrangements IYM finds it difficult to adhere to, considering other competing service delivery commitments,” Williams said.

The MEC said the local authority was under the National Treasury debt relief programme that was monitored monthly to ensure compliance with its conditions. “Both treasury and Cogta are monitoring the municipality on a monthly basis, although the municipality is not always in compliance with the requirements, the Eskom debt is being paid regularly,” he said. This, however, is contrary to a report compiled by Eskom on the debt of the municipality between April and September 2025.

The Eskom report indicates that IYLM made two payments in the reported period. One payment of R2 780.02 was made in May, followed by another of R2m in June. The capital and VAT interest was R13.4m in April, R13m in May and R18m in June, In July it was R23m, R24m in August and R19m in September.

Except for May and June due to the payments made, the same amounts appear in the accumulated outstanding monthly payments. This leaves the municipality at a staggering R111m debt default. It could not be established what the municipality currently owed the power utility at the time of writing. In a media statement released on May 5, the power utility said it was owed R111.6 billion nationally “despite the National Treasury’s intervention through the municipal debt relief programme aimed at restoring sound financial management and repeated support mechanisms offered by Eskom”.