Treasure warns municipal debt could affect Eskom's liquidity in the future

CAPE TOWN - Treasury is warning of the risk municipal debt owed to Eskom could have on its operations.

It said the amount owed had soared to R100 billion.

While Treasury says it's satisfied by the financial turnaround made by Eskom through a three-year bailout granted in 2023, the money owing to it by local authorities could impact the gains made.

Treasury expects Eskom to declare a profit for the 2023/24 financial year and does not expect it to need any further bailouts or guarantees in future.

But chief director, Jeffrey Quvane, warned that municipal debt remained a concern.

"The municipal debt which is increasing at a significant rate and which threatens the sustainability of the entity into the future."

Quvane said that while the power utility had shown discipline in managing its debt, municipal debt could affect its liquidity in future.

"It is something that requires government in its entirety to look into the municipal debt."

The Amended Debt Relief Bill reduces the financial assistance allocated to Eskom over the three-year period by R24 billion to R230 billion.