Electricity and Energy Minister Kgosientsho Ramokgopa warned that Eskom is at risk of collapse if its debt problem is not addressed.

Ramokgopa referred to South African municipalities owing Eskom R78 billion, which is increasing at an alarming rate.

He said this problem must be urgently addressed to protect the power utility’s ability to fulfil its mandate.

He said a large chunk of this debt is irrecoverable. “There’s no possibility under the sun that we will collect that R78 billion,” he said.

Eskom needs this money to reinvest in its infrastructure and perform maintenance to improve its generation fleet’s performance.

“Municipalities must pay that money. However, on an objective ground, they simply don’t have the means to pay,” he said.

Ramokgopa said the current debt trajectory owed to Eskom threatens the power utility’s future existence.

“To give you the magnitude of the problem, if we don’t resolve it, our projection is that at the current rate, by 2050, Eskom will be owed R3.1 trillion,” he said.

“Eskom will collapse. Generation capacity is going to be compromised. So, we must resolve this problem.”