The South African city of Johannesburg, the country’s economic hub, could face electricity supply reductions by the state-owned utility Eskom due to overdue debts, the company announced on Tuesday (19).
In a statement, Eskom said that the City of Johannesburg and its electricity utility, City Power, owe the company 315.26 million USD in overdue payments. A further 94.8 million USD is due on June 5.
Eskom issued a notice expressing its intention to “reduce, interrupt and/or terminate electricity supply to certain bulk supply points connected to the City of Johannesburg and City Power.”
The company stated that it has been working with the metropolitan municipality of South Africa’s economic centre for more than two years to resolve the overdue debt issue, but accused the city of repeated non-compliance.
Johannesburg’s financial difficulties have recently come under scrutiny after South Africa’s National Treasury expressed “serious concerns” about the state of municipal finances.
The state-owned electricity company has also faced long-standing financial problems, but has started to recover thanks to government bailouts and an unexpected improvement in the performance of its coal-fired power stations. Last year, the company recorded its first full-year profit in eight years.
