South Africa’s economic hub, the City of Johannesburg, has paid state-owned power utility Eskom more than R5.25 billion ($328 million) in overdue electricity bills, defusing a dispute that had threatened power cuts across the country’s largest commercial center and easing pressure on the municipality’s strained finances.

Johannesburg avoids Eskom bulk power cut

The payment settles long-running billing disputes between the City of Johannesburg and the state-owned power producer. The deal follows weeks of mediation led by the Ministry of Electricity and Energy, which convened talks among municipal authorities, local distributor City Power, and Eskom officials to safeguard the city’s electricity supply.

Following the transfer of funds, Eskom formally dropped an administrative process launched on May 17, 2026, to enforce collection. The utility had warned in May that it could cut bulk power links into the metropolitan area because of unpaid debts and broken payment agreements. The blackout threat had stoked fears among businesses and residents already navigating widespread municipal delivery problems.

Johannesburg metro fiscal stability debt resolution

Electricity and Energy Minister Kgosientsho Ramokgopa welcomed the resolution, saying a structured, multi-agency task team helped keep the lights on for the city’s homes and companies while protecting the state utility’s bottom line. Even with the overdue arrears cleared, the city’s ledger remains strained. Johannesburg still owes an active account balance of R1.8 billion ($112.4 million), due by Aug. 31, 2026.

Johannesburg Mayor Dada Morero called the debt settlement a critical step toward fiscal stability and pledged that the metro would meet its month-end payment deadlines. Still, the local government faces heavy scrutiny over whether it can repair its wider finances and stabilize basic services after years of administrative turmoil.