Eskom releases frozen funds back to struggling municipality

Eskom says it has reached an agreement with the Maluti-a-Phofung Local Municipality, which will see millions directed back to the municipal account.

The municipality owes the Eskom over R5bn and, earlier in the week, its bank account was seized by power utility in an effort to recover some of the debt.

Eskom bails out municipality

However, on Saturday, Eskom revealed that it had taken a step to assist the municipality in meeting its running costs, which include employee salaries.

According to a statement issued out by the utility, the amount released back to the municipality is R90 million.

“As part of this agreement which has been made an order of court, the parties must conclude an agreement on or before 7 August to address the municipality’s R5.3bn debt to Eskom and to service its monthly current account.”

Eskom

Billions owed to power utility

Eskom said the bank account had R220 million when it was seized on 21 July.

“The account balance will remain attached until a repayment agreement that meets Eskom’s requirements has been concluded, or until the court orders otherwise. “This step on the part of Eskom is a result of the repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of electricity.”

Eskom

It added;

“Eskom will continue to explore all available legal avenues to ensure that outstanding municipal debt is recovered.”

Eskom

Eskom says it’s owed a total of R30.9bn by municipalities, which threaten its sustainability.

#Eskom #MediaStatement

Eskom agrees to partially release frozen funds to assist Maluti-a-Phofung with running costs pic.twitter.com/kFB19h1OBt

— Eskom Hld SOC Ltd (@Eskom_SA) July 25, 2020

The debt accrued by the Maluti-a-Phofung municipality dates back to October 2013.

The municipality, which is situated just outside Bloemfontein, has been the scene of a spate of service delivery protests in recent months.