Urgent negotiations between national government, the City of Johannesburg, and Eskom have produced a provisional agreement to prevent bulk electricity supply interruptions threatened for 8 July over the city’s outstanding debt exceeding 5 billion rand.
Electricity Minister Dr. Kgosientsho Ramokgopa confirmed the breakthrough following high-level talks with Johannesburg Mayor Dada Morero and City Power executives. The minister stated that technical teams from both the municipality and Eskom would begin immediate joint operations to address the crisis.
“The city owes over 5 billion rand, which represents approximately 4% of the total debt owed by all municipalities to Eskom,” Ramokgopa said. “While a payment arrangement existed previously, the city defaulted on that agreement. We have now agreed to reinstate that framework to assist City Power in stabilising its finances.”
A central component of the rescue plan is the implementation of a Distribution Agency Agreement (DAA) model. This framework aims to strengthen revenue collection, reduce technical and non-technical losses, and improve operational capacity within City Power.
Ramokgopa outlined the specific challenges the joint task force will address. Technical losses stem from aging infrastructure, including substations and transformers that have failed or been damaged. Non-technical losses involve illegal connections and power theft. Together, these issues account for an estimated 29% of revenue currently not being collected.
“We must address the entire value chain,” the minister explained. “This includes technical losses, the completeness and accuracy of billing, and ensuring that those entitled to free basic services receive them. We also know there are instances where industries are charged residential tariffs. For this package of interventions to succeed, we cannot work at arm’s length.”
The city’s revenue collection rate has fallen to 81%, below the target threshold of 86% and higher, further straining its ability to settle debts. Capacity constraints have been exacerbated by the departure of experienced engineers from City Power.
Under the agreed implementation structure, operations on the city’s side will be led by the city manager and City Power’s acting CEO. Eskom’s CEO will lead the utility’s technical team. Both sides confirmed readiness to deploy resources immediately.
“We are confident that we will resolve these issues and help City Power return to where it should be,” Ramokgopa stated. “City Power was once among the best-performing organisations in our country. Our goal is to re-engineer it, resolve its problems, and reposition it for sustainable service delivery.”
The agreement comes against a backdrop of escalating financial pressure on South African municipalities and ongoing challenges within the national electricity supply chain. Officials emphasised that the success of the intervention depends on sustained collaboration, transparent monitoring, and swift execution of the agreed technical and administrative measures.
