(Bloomberg) -- Two of South Africa’s biggest municipalities owe the state-owned power utility a combined 4.7 billion rand ($244 million).
The City of Tshwane, which includes the capital, Pretoria, owes 3.2 billion rand which accumulated in July and August due to erratic payments, Eskom Holdings SOC Ltd. said in a statement on Wednesday. The industrial hub of Ekurhuleni, which includes the country’s biggest airport east of Johannesburg, is 1.5 billion rand 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 organization, both municipalities have failed to fully honor 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 63.2 billion rand.
Read more: S. Africa’s Eskom Owed $3.3 Billion by Municipalities, BD Says
Blackouts Cost Municipalities Billions in Lost Income (Oct. 4, 7 a.m.)
Rotational blackouts implemented by Eskom caused a total loss of 21 billion rand for South African municipalities in the 2022-23 financial year because these councils could not sell power during periods of so-called loadshedding, Beeld reported, citing Cooperative Governance and Traditional Affairs Minister Thembi Nkadimeng.
Town and city councils also had to spend billions of rand on repairing electricity and water infrastructure that break due to blackouts and on diesel for backup generators, Nkadimeng said, according to the Johannesburg-based newspaper.
Mining Companies Flag Electricity Constraints as a Risk (Oct. 3, 1:32 p.m.)
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 108 billion rand in the 12 months through June 30, from 206 billion rand the year before. Operating expenses increased by 11%, reflecting above-inflation increases in electricity and fuel costs, chemicals and labor, PwC said.
Mining firms also noted logistical constraints for bulk commodity exports, fluctuations in commodity prices and exchange rates and illegal mining as risks.
Read more: South African Mining Profits Slump by Almost Half, Fin24 Says
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