Two of South Africa’s biggest municipalities owe Eskom a combined R4.7-billion.
The City of Tshwane, which includes the capital, Pretoria, owes R3.2-billion, which accumulated in July and August due to erratic payments, Eskom said in a statement on Wednesday.
The industrial hub of Ekurhuleni, which includes the country’s biggest airport east of Johannesburg, is R1.5-billion in debt.
“The payment patterns by both municipalities have deteriorated to concerning levels that further threaten Eskom’s liquidity, financial performance, and sustainability,” the utility said. “Despite all the avenues that Eskom has explored to recover what is due to the organisation, both municipalities have failed to fully honour their payments and to comply with their electricity supply agreements.”
The debt-laden power company’s financial woes are exacerbated by towns and cities not paying their bills. Electricity minister Kgosientsho Ramokgopa said in August they owed Eskom a combined R63.2-billion.
Rotational blackouts implemented by Eskom caused a total loss of R21-billion for South African municipalities in the 2022/2023 financial year because these councils could not sell power during periods of load shedding, Beeld reported, citing cooperative governance & traditional affairs minister Thembi Nkadimeng.
Town and city councils also had to spend billions of rand on repairing electricity and water infrastructure that breaks due to blackouts and on diesel for backup generators, Nkadimeng said, according to the Johannesburg-based newspaper.
Electricity constraints contributed to South African mining companies’ profit plunging by almost half in the past year, according to a report by PwC.
An analysis of mining companies showed that combined net profit slumped to R108-billion in the 12 months to 30 June, from R206-billion the year before. Operating expenses increased by 11%, reflecting above-inflation increases in electricity and fuel costs, chemicals and labour, PwC said.
Mining firms also noted logistical constraints for bulk commodity exports, fluctuations in commodity prices and exchange rates and illegal mining as risks. — (c) 2023 Bloomberg LP