In a significant move to address crippling municipal debt, power utility Eskom has agreed to write off over R248 million owed by the Sol Plaatje municipality. This forms part of a stringent national relief program designed to stabilize the finances of struggling municipalities and the utility itself.
The write-off, which will come into effect in the first week of September, is a conditional step within the National Treasury’s Eskom Debt Relief Programme. The Sol Plaatje municipality, which encompasses Kimberley and Ritchie, currently owes Eskom a total of just over R1 billion.
To qualify for the relief, municipalities are required to reinforce their own electricity revenue streams. A spokesperson for the Sol Plaatje municipality indicated that the implementation of smart meters has “slightly improved” its income from electricity sales.
Municipal Manager Thapelo Matlala acknowledged the long road ahead. “We are on our way as a municipality to try and be financially sound. It is going to be a process,” he stated. Matlala clarified that the R248 million write-off represents one-third of the total debt, and the municipality is now left with two remaining yearly installments.
He expressed hope for future relief, stating, “If we again keep our current account up to date… in the next year we will also be eligible for another one-third.” This conditional structure means the municipality could clear its entire Eskom debt within two years if it meets all its payment obligations. Matlala believes this will “go a long way in terms of improving our services.”
The Sol Plaatje municipality’s debt to Eskom is a microcosm of a national crisis. Eskom raised serious concerns over the approximately R102 billion owed by municipalities across the country.
An Eskom spokesperson emphasized the unsustainable nature of this debt, warning it “could put Eskom in a difficult position if we don’t take action.” The utility is working with National Treasury to find solutions, cautioning that without progress, the massive debt could undermine the positive impact of the R254 billion debt relief package Eskom itself received from the government.
Eskom is also encouraging municipalities to sign Distribution Agency Agreements (DAAs), through which the utility can provide direct support to help them improve revenue collection from their own residents and businesses.
This is a critical point for Sol Plaatje, which faces a massive internal debt crisis of its own. As of June 2025, residents owed the municipality R2.5 billion for services, businesses owed over R700 million, and government departments owed more than R780 million in rates and taxes. Earlier this year, the municipality launched its own debt relief program for residents in an effort to recoup these funds and meet its obligations to Eskom.
Despite the challenges, the Sol Plaatje municipality says it remains committed to paying off its remaining debt to the power utility.