- Eskom and Merafong City Local Municipality (Merafong) officially signed a Distribution Agency Agreement (DAA) at the Merafong Council Chambers, marking a historic step in improving operational efficiency and electricity service delivery in the municipality.
- Merafong has faced significant financial strain, with Eskom debt nearing R920 million by mid-2024 and grown by 74% since.
Municipal debt to Eskom surged from R28 billion in 2020 to R105 billion by September 2025, with 14 municipalities responsible for 58% of the total debt. To address this, the National Treasury and Eskom launched the Municipal Debt Relief Programme in April 2023, offering conditional debt write-offs to municipalities. However, many municipalities, including Merafong, have struggled to meet the conditions.
Eskom has prioritised the 14 most indebted municipalities for the DAA model, which allows Eskom to assume responsibility for billing, revenue collection, and tariff administration while the municipality retains capital investment responsibilities. Merafong is the third municipality to sign the DAA, joining Emfuleni and Maluti-a-Phofung.
The DAA will ring-fence Merafong’s electricity distribution, improving billing efficiency, service reliability, and revenue collection. It will also provide targeted debt relief while preserving jobs and enabling skills transfer. Merafong’s overdue debt grew by 74% between 2024 and 2025, underscoring the need for urgent intervention.
This agreement aligns with Merafong’s broader strategy to stabilise its electricity infrastructure, improve financial management, and support local economic development. The agreement will also ensure the disbursement of Free Basic Electricity to eligible households directly by Eskom.
Municipal Manager Dumisani Mabuza emphasized the importance of this collaboration, stating, “This agreement represents a shared commitment to strengthening our electricity network and ensuring reliable services for our residents.”
Eskom’s Acting Group Executive for Distribution, Agnes Mlambo, highlighted the DAA as a crucial step toward operational recovery, stating, “This partnership will strengthen governance and ensure consistent electricity supply while addressing Merafong’s financial challenges.”
Both parties are committed to working together to ensure smooth implementation of the DAA, with improved service delivery and long-term sustainability at the forefront.
Author: Bryan Groenendaal
