- Johannesburg faces growing risk of electricity supply disruptions as its R5.3 billion debt to Eskom remains unresolved.
- Busisiwe Mavuso says resolving municipal debt is critical to Eskom’s financial recovery and South Africa’s electricity reform agenda.
- Independent ownership of transmission assets is essential to attract grid investment and create a competitive electricity market.
Johannesburg’s escalating debt dispute with Eskom has entered a critical phase, raising concerns over the city’s electricity security and the future of South Africa’s power sector reforms.
According to Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), the city’s failure to sustainably address its R5.3 billion debt to Eskom poses a significant risk not only to Johannesburg but also to South Africa’s broader economic recovery.
The crisis intensified after Johannesburg missed a 5 June payment deadline agreed with Eskom, prompting the utility to resume legal proceedings that could ultimately result in electricity supply restrictions to City Power. The move follows a temporary 30 day reprieve facilitated by Electricity and Energy Minister Kgosientsho Ramakgopa.
While Johannesburg has paid approximately R1.2 billion towards its account since the legal process began, Eskom maintains that the city’s outstanding debt remains unresolved.
Mavuso said Johannesburg’s financial difficulties extend beyond its Eskom obligations. Analysis conducted by BLSA indicates the city is, on average, nearly a year behind in paying suppliers, highlighting deeper fiscal challenges that continue to undermine service delivery and infrastructure investment.
She noted that the city has consistently struggled to collect the revenues projected in its budgets while spending insufficiently on maintaining and expanding critical infrastructure.
“South Africa cannot afford for Johannesburg to fail, and the city’s electricity supply is now genuinely at risk,” Mavuso said.
Johannesburg remains Eskom’s largest municipal debtor, making resolution of the debt a key component of the utility’s financial recovery strategy. Mavuso argued that restoring Eskom’s balance sheet is essential not only for securing reliable electricity supply but also for supporting the country’s transition towards a competitive electricity market.
She reiterated that business remains committed to supporting solutions to Eskom’s municipal debt challenges while ensuring continued progress on South Africa’s electricity reform roadmap.
Central to that reform agenda is the establishment of an independent transmission system operator that provides neutral access to the national grid.
Mavuso said the transmission operator must own the grid’s assets rather than merely operate them on Eskom’s behalf. In her view, ownership is fundamental to ensuring a fair and transparent electricity market where all participants can compete on equal terms.
She welcomed recent confirmation from the Presidency that the future transmission entity will own transmission assets, aligning with commitments previously outlined by President Cyril Ramaphosa.
According to Mavuso, asset ownership is also critical for attracting the substantial investment required to modernise and expand South Africa’s transmission infrastructure.
“An operator that runs the grid but does not own it is like asking a competitor in a race to also act as the umpire,” she said.
Despite progress on policy, implementation remains slow. The unbundling of the transmission business has faced repeated delays, with a presidential task team recently receiving an extension until the end of June to complete its recommendations.
Author: Bryan Groenendaal
