A last-minute accord between national government, Eskom, and the City of Johannesburg has averted an imminent bulk power shutdown, with coordinated intervention teams deploying immediately to tackle the metro’s electricity and financial instability.
Electricity Minister Dr. Kgosientsho Ramokgopa announced the resolution following urgent consultations with Johannesburg Mayor Dada Morero and City Power leadership. The agreement forestalls Eskom’s threat to suspend electricity supply starting 8 July due to the city’s outstanding balance exceeding 5 billion rand.
“The municipality’s debt represents roughly 4% of what all South African local authorities collectively owe to Eskom,” Ramokgopa stated. “A repayment structure was previously in place, but the city fell behind on those commitments. We have now reactivated that framework to provide City Power with the support it needs.”
Central to the recovery strategy is the activation of a Distribution Agency Agreement (DAA), a collaborative operational model designed to bolster revenue recovery, curb energy losses, and restore technical capacity within the city’s power utility.
Ramokgopa detailed the dual focus of the intervention. Technical losses arise from deteriorating infrastructure—including substations and transformers that have malfunctioned or been destroyed. Non-technical losses stem from illegal connections and unauthorized power diversion. Combined, these factors account for approximately 29% of revenue that currently goes uncollected.
“Our approach must cover the full value chain,” the minister explained. “That means addressing infrastructure failures, improving billing accuracy and completeness, verifying that eligible residents receive free basic electricity, and ensuring industries are billed at commercial—not residential—tariffs. These interventions require close, hands-on partnership, not distant oversight.”
Compounding the challenge, the city’s revenue collection efficiency has dropped to 81%, below the sustainable benchmark of 86% or higher. This shortfall has been worsened by the departure of skilled engineers from City Power, weakening operational capacity.
Implementation of the rescue plan will be jointly managed: the city manager and City Power’s acting CEO will coordinate municipal efforts, while Eskom’s CEO will direct the utility’s technical contingent. Both sides confirmed that joint teams are prepared to commence field operations without delay.
“We are confident these measures will stabilise City Power and restore its standing,” Ramokgopa affirmed. “This institution was once a national leader in service delivery. Our objective is to re-engineer its operations, resolve systemic challenges, and reposition it for long-term reliability.”
The agreement unfolds amid broader fiscal strain affecting South African municipalities and persistent pressures on the national power grid. Officials underscored that lasting success hinges on consistent cooperation, transparent progress tracking, and rapid execution of the agreed technical and administrative actions.
