Eskom Threatens Johannesburg With Power Cuts Over Unpaid Debt

South Africa’s largest city and economic hub, Johannesburg, could face reduced electricity supply after state-owned power utility Eskom warned it may throttle power over unpaid debts.

Eskom said on Tuesday that the City of Johannesburg and its electricity distributor, City Power, owe arrears totaling 5.26 billion rand ($315.26 million), with an additional 1.58 billion rand due on June 5.The City of Johannesburg had not immediately responded to a Reuters request for comment.

Eskom said it had issued a notice of its intention to “reduce, interrupt and/or terminate the supply of electricity to certain bulk supply points” serving the city and City Power.

According to Eskom, it has been engaging with the Johannesburg metropolitan municipality for more than two years regarding the unpaid debt, but the city has repeatedly defaulted on payment agreements.

Johannesburg’s financial challenges have recently drawn attention after South Africa’s National Treasury raised “serious concerns” about the state of the city’s finances.

Eskom itself has faced years of financial struggles, but the utility has recently shown signs of recovery following government bailouts and improved performance at its coal-fired power stations. Last year, Eskom posted its first full-year profit in eight years.

($1 = 16.6846 rand)