Joint Meeting on Portfolio Committee of COGTA 10 October 2017 Electricity Distribution Industry Challenges

Presentation outline Macro issues in the electricity distribution industry Current Realities Background Municipal constitutional powers impasse between Eskom and Municipalities Eskom Debt NERSA Licensing process Eskom proposed revenue management initiative Municipalities and renewable energy Possible Way Forward

Macro issues Eskom is an important national strategic asset and its financial viability is of paramount importance; Equally important is that municipalities must be able to provide sustainable and affordable services and to collect revenue so they can pay creditors such as Eskom and be financially viable; The Constitutional, legislative and fiscal frameworks are carefully designed to ensure that local government delivers sustainable services (both in terms of the actual provision of the services and financially); The current dispensation in the Electricity Distribution industry is subversive of the existing legal frameworks which directly undermines municipalities’ ability to fulfil their constitutional mandate in the provision of services; In parallel, the energy sector is changing at a pace never seen before. r

Current Realities The electricity distribution industry is currently experiencing rapid structural and behavioral changes:- Energy security threats and rising electricity prices, Increasing unemployment leading to low revenue collections in Municipalities Unavoidable market dynamics – Customer using less energy and becoming their own suppliers of electricity – Loss of revenue Lack of capacity and skills for Planning Project management and contracting Drafting of bylaws Setting and designing tariffs Revenue management and protection etc. These intertwined dynamics have radical implications for local municipalities that are compelled to re-define their role in the electricity value chain and adapt their funding and operating models. The dynamics also call for government to review or develop support strategies for municipalities in respect to electricity reticulation. Also calls for reviewing of local government funding models.

Background In 2010, Cabinet decided to terminate the Electricity Distribution Industry (EDI) restructuring and to discontinue the process of creating the Regional Electricity Distribution (REDS) with immediate effect. Although the Electricity Distribution Industry Holdings (EDIH) had made significant progress in the process to establish the REDs, Cabinet approved the recommendation that the Department of Energy takes over the programmes previously executed under the EDIH mandate. Recommended that DoE review the whole electricity value chain with a view to developing a holistic approach to: revitalize electricity infrastructure energy security as well as the financial implications. An administrator would be appointed to attend to the winding up of EDIH.

Background - Demise of the REDs Model 2010 Cabinet abandons REDs model Notes lack of support for a constitutional amendment After 7 years and the expenditure of hundreds of millions, Cabinet decides to close EDI Holdings DOE asked to “review the whole electricity value chain with a view to developing a holistic approach to revitalise electricity infrastructure, energy security as well as the financial implications” 2011 EDI Holdings transferred to DoE 2012 Presidential Infrastructure Coordinating Commission (PICC) EDI included in Strategic Investment Priorities (SIPs) - Very Little is happening here to date DoE applies for funds to run pilot exercises in using Approach to Distribution Asset Management (ADAM)

Background - What were the Key Drivers of EDI Restructuring Fragmentation and inefficiencies: no economies of scale Inequitable treatment of customers / tariffs Non-rationalised Regulatory frameworks in the EDI Financial crisis – many municipal distributors bankrupt Non-payment of services rising – loss of revenue Lack of critical skills in distributors Monopoly model was and is no longer an option Inadequate investment in refurbishment and maintenance – Backlog needed an investment of 25bn at that time (Before 2010) Loss of experience and skills Accelerated electrification etc.

Some Key Questions Are the issues in the previous slide still relevant? YES After closing down the restructuring projects, did we have an alternative or plan to rehabilitate infrastructure and strengthening municipal distributors? Are things getting worse? MOST DEFINITELY Municipalities owing Eskom over R11bn and its escalating Some may not come out of the Eskom debt situation without any support Municipalities owed over R116bn and most of it irrecoverable Most if not all municipalities are grossly under skilled Theft and infrastructure vandalism is on its record high (Costing the economy over R6bn annually) Was the mandate given to DoE to “review the whole electricity value chain and developing a holistic approach to revitalise electricity infrastructure, energy security as well as the financial implications” executed? What is the game plan now?

Contributing Factors to the Crippled EDI Constitutional authority of municipalities is undermined by Eskom; Municipalities unable to retain employees with critical skills; Municipalities in the outskirts of the country have under-capacitated electricity departments , due lack of capacity and skills – e.g. Experienced Engineers generally don’t want to work in these areas and these munics cannot attract these skills; Government Departments or State Entities concerned do not have Support Strategies for Local Government in accordance with Section 154 of the constitution; Record low revenue collection in municipalities but local government funding model remains unchanged; Unemployment has a ripple effect to the sustainability of the service delivery institutions; Evolving industry with introduction of renewable energy (Prosumers); Industry has changed drastically but the model for electricity distribution has not been reviewed by the policy maker. r

Municipal Constitutional powers impasse between Eskom and Municipalities

Constitutional Framework Section 151(3) of the constitution deals with the rights of municipalities to govern, on their own initiative, the local government affairs of their communities, subject to national and provincial legislation. In order to protect the autonomy of local government, section 151(4) prescribes that national and/or provincial government may not compromise or impede a municipality’s ability or right to exercise powers or perform functions.   Section 156(1) of the constitution provides for the executive authority of the municipality and that it has the right to administer the local government matters listed in Part B of Schedule 4, including the reticulation of electricity. Provision of electricity is a constitutionally mandated responsibility which cannot be taken away from municipalities by either national or provincial government. r

Constitutional Framework (Cont.) Chapter 8 of the Systems Act empowers municipalities to regulate the provision of a municipal services through mechanisms of a service provider.   In terms of Section 76 of the Systems Act, when a municipality provides services through a service provider, it would be required to enter into a Service Delivery Agreement (SDA). The Electricity Regulation Act defines municipality as a category of municipality that has executive authority over and the right to reticulate electricity and when municipalities seek to outsource that function to an external mechanism, it ought to comply with section 28 of the Electricity Regulation Act. Section 28 of the Electricity Regulation Act, deals with the selection and appointment of external service providers. It enjoins a municipality to comply with Chapter 8 of the Systems Act prior to entering into an SDA with a service provider. r

The problem Constitutional authority of municipalities is undermined by Eskom In the absence of a contracting and regulatory mechanism (SDA) between Eskom and municipalities: Municipalities are unable to levy surcharges in Eskom supply areas Municipalities are unable to exercise credit control in Eskom supply areas Lack of tariff parity between municipal supply areas and Eskom supply areas Conflicts over supply areas License issued by NERSA to Eskom to reticulate electricity is defective as it bypasses the executive authority of municipalities Without an SDA, Eskom’s service unlawfully encroaches upon the constitutional powers of the municipality There are several structural and systemic issues arising from the current dispensation r

The absence of an SDA with Eskom leads to the inability to… Control Retail Tariffs Municipalities unable to set electricity prices or apply surcharges for Eskom supply within their jurisdiction Residents pay different rates within the same municipality Undertake integrated planning Absence of municipal boundary based by Eskom Difficult to plan for areas serviced by Eskom Monitor Compliance and Performance Eskom does not report to the municipality on service provision within the municipality Municipality unable to monitor compliance and manage performance and thus unable to protect citizens’ rights Slide is self-explanatory

SALGA IGR Engagements on Constitutional issue Several IGR engagements have been initiated by SALGA with NERSA, Eskom, COGTA, NT, DPE and DOE over the past 5 years and beyond – No mutual agreement to this end Eskom do not recognize section 156 of the Constitution municipalities as Electricity Reticulation Service Authorities NERSA and Eskom do not recognize s28 of the Electricity Regulation Act which requires compliance & gives effect to S76a and b of the MSA (SDA) 2013, SALGA and its members drafted a generic SDA and engaged Eskom CEO 2013, CEO’s of SALGA and Eskom agreed in principle on the matters of SDA 2014, MoU signed between SALGA and Eskom to address industry challenges and agree on a Framework Agreement– persistent disagreements between officials 2015, engaged Eskom and NERSA during several workshops and meetings, still no agreement on SDA

SALGA engaging on Constitutional issue 2015 LG Week, NCOP made resolutions for action by NERSA and Eskom on SDA – No progress, NCOP resolution was not recognized by these institutions 2015 MINMEC, the DMs of Energy and COGTA made resolution that SDA must be signed No progress and no SDA signed. 2016, the Minister of COGTA and NERSA leadership agreed on SDA matter Implementation of this agreement did not come into effect due to officials disagreement and strong opposing views – Minister’s instruction not recognized. 23 August 2016, SALGA and Eskom CEOs met to discuss the relationship of Eskom and municipalities which resulted in establishment of Working Group to address the various challenges Workgroup met on 06 December 2016 – no agreement was reached and both parties acknowledged that the legal route may need to be pursued to get clarity on the issue January 2017, SALGA procured services of a legal firm for legal advise and opinion on taking the SDA matter forward through the legal processes

SALGA engaging on Constitutional Issue February 2017, SALGA asked to stop the legal process and the IMTT was formed to deliberate on the challenges with the intention to find solutions April 2017, IMTT Terms of Reference approved May 2017, IMTT first meetings June 2017, Eskom made some concessions which were subject to board approval in June 2017 01 July Eskom concessions approved by board and effective July 2017, IMTT agreed that the constitutional matter cannot be resolved between stakeholders and recommended that a declaratory order be sought August 2017, PCC declined recommendation of declaratory order and proposed that a solution be found and reported to the next PCC in November Other structural and Systemic issue discussions are underway at the IMTT platform

Practical Examples

Park There’s an invisible line running across municipalities, where: Municipalities’ constitutional powers are subverted the developmental role of local government is undermined some communities are prejudiced relative to others municipal revenue collection is undermined

Park If you live on this side: You pay a surcharge which contributes to the basket of non-trading services such as parks, libraries, pavements You subsidise services for those living on the other side Your electricity is used as a credit control mechanism if you don’t pay your rates and taxes Your electricity tariff is probably higher than on the other side Park For example ALEXANDRIA TOWNSHIP Municipality

Park For example SANDTON If you live on this side: You don’t pay a surcharge and thus contribute less to non trading services These services are subsidised for you Your electricity can’t be cut if don’t pay your rates and taxes Your electricity tariff is likely to be lower than on the other side Park For example SANDTON

Alex subsidises Sandton Park Alex subsidises Sandton ALEXANDRIA TOWNSHIP SANDTON Municipality

Examples of collection rates Park Municipal collection rates for service charges, rates and taxes in the municipal supply areas are around: 80% Small towns 94% Cities                  94%  Metros                                  Municipal collection rates for other services (water, waste, rates, taxes etc ) in Eskom supply areas are around: 11% Smalltowns                40% Cities                 56%  Metros                 Municipalities cannot exercise credit control in Eskom supplied areas – thus collection rate is lower

Park Municipality Therefore in Eskom supply areas, municipalities are deprived of their constitutional and legislative powers in terms of electricity reticulation. Customers are also deprived of Executive accountability

Impact of Eskom Supplying within CoJ Income and Cost Line Units R’000 000 Value Estimated Revenue @ CoJ Eskom Areas 9,501 GWh R14,903 Other CoJ Revenue based on Electricity Sales: Demand Side Management Levy Municipal Surcharge R114 R120 Cost of Sales 11,447 GWh R11,128 Net Impact to CoJ R4,009 Of the total of 275K properties under Eskom serviced areas, 261k is considered to have active electricity connections The revenue calculation is based on the following: Aligning property category to a tariff; Existing average consumption, CoJ applicable Electricity Tariff, As part of the financial planning CoJ estimated its total losses on electricity to be at 17% for 2017/2018 FY.

Negative impact on municipal revenue collection Municipalities are unable to exercise credit control in Eskom ‘supply areas’ which has a negative impact on municipal revenue; Collection rates in municipal supply areas are in general much higher than in ‘Eskom supply areas’ as illustrated in the example of Overstrand below:-

Xhariep The district has consolidated total debtors book amounting to R255.3 million. None of the municipalities in the district reported debt write-off or debt impairment. In the absence of debt written off and weaker collection that are being reported, the debtors continues to be spiraling up. Water services carries the highest outstanding debtors at 32.6 percent or R83.3 million of the total debtors to date. Whilst households customer group carries 78.4 per cent or R200 million of the total debt 5

Municipal Grants and Transfers vs Own Revenue based on Distributing and Non-Distributing Munics The revenue collection and credit control problem A municipality is financially stronger when it can fund its own expenses through its own revenue, rather than relying on national and government assistance through grants and transfers. However, from the above graph, it can be seen that: As the municipality becomes less urban in nature, there is a heavier reliance on grants and transfers. This is to be expected, because urban municipalities house the bulk of the country’s economic activity. It thus also houses the more affluent populations. Thus they have a greater capability to bring in revenue. District municipalities have a very high reliance on grants and transfers. Many of them have delegated service provision to the LMs and thus have weak own revenue. The second graphs paints an interesting picture: Those municipalities that distribute electricity themselves are markedly stronger financially than those that do not. Although, this cannot be attributed to the distribution of electricity alone, it is a factor. Electricity revenue has been a major contributor to overall municipal revenue.

Lack of tariff parity Eskom charges their tariff (bulk tariff) in the Eskom supply areas and municipalities charge their tariff (retail tariff) in the municipal supply areas. This causes lack of tariff parity, for example: Eskom reticulates electricity to Sandton and City Power (Jhb Metro) reticulates to Alexandra township. The tariff for Sandton is less than the tariff for Alexandra. The fiscal framework allows municipalities to charge a ‘surcharge’ on electricity tariffs. Customers in the Eskom supply area are not charged this ‘surcharge’ and are thus not adequately contributing to the broader basket of non-trading services

Contribution to Cross-subsidies If City of Joburg’s tariffs are used as a benchmark for the CoJ area of supply, then; The RED denotes the categories that contribute to cross subsidisation, while the GREEN denotes the receivers of cross- subsidies There are only 2 Eskom tariffs (under the Residential category) that would be considered to be contributing to cross subsidies as they are higher than their CoJ counterparts, otherwise all other tariffs are subsidised by the CoJ tariffs.

Eskom has higher electricity users Although electricity distribution is constitutionally a municipal competency, Eskom still plays a huge role in electricity distribution in South Africa. Eskom distributed 212 107 GWh or 66% of total electricity distributed to customers in the 2011/12 financial year (NERSA, 2012) to 15% of the total customers Municipalities only distributed 96 537 GWh or 30% of total electricity distributed, even though they deliver to 85% of total customers Although Eskom serves fewer customers, the statistics indicate that Eskom customers are relatively higher electricity users, driven mainly by the energy intensive mines and industries (NERSA, 2012). r

Eskom Debt

Defaulting Municipalities on Eskom Payment Arrangements Debt has escalated for over 2bn in the past four/ five months to over R11bn; Adherence to Payment Arrangements is still problematic for a number of municipalities; Municipalities with Overdue Balances generally also struggle to pay their Current Account resulting in Overdue balance increasing; When the Municipalities receive their Equitable Share Payments the Eskom payments do improve but this is not a sustainable measure; Pressure exerted through the PAJA process is not a sustainable solution as it yields Once off payments Re-negotiation of Payment Plans Litigation by Municipality or Individual Customers Impact on Economy There is a good correlation between the non-paying municipalities and the AG report on Local Government (Financial Health Status). r

Defaulting Municipalities on Eskom Payment Arrangements The alarming situation is that only 20 out of the 62 payment arrangements are being honoured with Mpumalanga and Free State being the highest or owing the biggest chunk of the debt; A strong Correlation between the list of non paying municipalities and the AG report indicating sustainability of the Municipalities being at risk has been observed; Unless systematic and structural issues are resolved, financial recovery plans are developed, implemented and monitored these municipalities will not get out of the situation; The challenges in these municipalities cannot just be isolated to governance or administration; Fiscal injections are needed in these municipalities and overall restructuring of how municipalities should be funded; AGs report confirms municipality’s going concern is a problem but not isolating it to bad management, it also raises structural issues; and There are also macro factors like, slow economic growth, unemployment and poverty.

STRUCTURAL AND SYSTEMIC CHALLENGES Structural Challenges in Electricity Reticulation: Legacy issues in the reticulation of electricity, in particular the resultant inequity in terms of tariffs charged ; The provision of public and street lighting in Eskom reticulated areas; and The role of municipalities in renewable energy not clear/ or not considered. Systemic Challenges in Electricity Reticulation The current reality under ESKOM credit control mechanisms, for municipal bulk accounts and end users services by ESKOM in order to align it to municipal credit control by-laws and cycles; The unsustainability of current payment agreements between ESKOM and municipalities in arrears; The historical debt owed to and by municipalities; Reconciliation of municipal debt to ESKOM; and Eskom Notified maximum demand Penalties.

Example to illustrate impact of interest and penalties: Naledi Municipality Case Penalty on exceeding NMD Interest on overdue account The actual usage amounts to R7.7 million The rest is interest and penalties and VAT thereon – amounting to R1.1 million This interest is charged on the 16th day after billing

Example to illustrate the impact of NMD Naledi Municipality Case Example on Eskom Notified Maximum Demand (NMD) Penalties Example to illustrate the impact of NMD Naledi Municipality Case The penalty of R212 313 is charged for a full 12 monthly, not only for the month during which the maximum demand was exceeded (even if the municipality does not exceed demand again during that year) Thus the annual penalty amounts to R2.5 million Penalty on exceeding NMD

Notified Maximum Demand Penalties (NMD) Where municipalities exceed their NMD more than once in a given month, a penalty is levied over the next 12 months Municipalities are required to pay the full arrears account in order to increase the NMD . In cases where a municipality is unable to pay their full arrears they continue to exceed NMD and pay penalties Municipalities must be assisted with technical capacity to re-determine a realistic Notified Maximum Demand. Upon conclusion of this process, Eskom should consider the increase of the current NMDs of municipalities, irrespective of arrears Further, Eskom needs to make provision for amending the NMD where there is roll out of electrification projects Penalties should only be levied for the specific month in which the Notified Maximum Demand is exceeded and not for a 12 month period

Failure to deal with historical debt Example: Maluti A Phofung At 31 December 2016, the municipality owed Eskom R1,67 billion The average total bulk electricity purchases is R50 million per month The amount owed to Eskom equates to almost 3 years worth of annual purchases Current debt is most likely in excess of 5 years Prescription of debt not taken into account by Eskom Apportionment of capital debt versus interest has not been analysed Example: Mafube At 31 December 2016 the municipality owed Eskom 53,2 million The average bulk electricity purchases is R600 000 per month which amounts to approximately R7.2 million per annum Thus the outstanding debt equates to approximately 8 years of annual purchases Without a solution to historical debt the debt to Eskom will balloon exponentially

Failure to deal with historical debt In order for municipalities to address the capital portion of the historical debt owed to Eskom, it is proposed that: all interest on the historical debt be waived; and any payment made in terms of the payment agreements between Eskom and municipalities be allocated to the outstanding capital The writing off of historical debts of municipalities raised by SALGA has not been addressed and thus needs a policy intervention.

The Eskom Concessions Eskom committed on the following: Rationalisation of municipal tariffs to reduce tariff options from eleven (11) to three (3); Decrease the interest rate charged on overdue balances from prime plus 5% to prime plus 2.5%; Change the payment period on municipal bulk accounts from 15 days to 30 days; Change Eskom payment allocation policy to allocate payments to capital debts first before allocating payments to interest charged; and Allow municipalities to pay connection charges over twenty-year period at relevant interest rate instead of Cash Up Front. At the IMTT meeting of 14 June, Eskom reported that its Board approved all these commitments except the last one on connection charges Eskom has reported that these concessions are effective from 01July 2017 The writing off of historical debts of municipalities raised by SALGA was not addressed and thus needs a policy intervention. The Eskom concessions does not resolve all systemic issues in the industry. Other systemic and structural issues have been elevated to the PCC.

NERSA Licensing process

NERSA License application process S.28 of the Electricity Regulation Act requires the municipalities to comply with chapter 8 of the Systems Act; It recognise the constitutional powers of municipalities as well as the need for service delivery agreements with entities providing a service within their jurisdiction – The agreement that Eskom doesn’t want to sign; The Act further grants the minister the powers to issue regulations outlining the administrative process to implement S.28; So far no regulations have been issued to this effect as a result the conflict between Eskom and Municipalities on areas of supply continues.

NERSA License application process NERSA is currently updating their Geographic Information System (GIS) to review the supply areas (Schedule 1) of electricity distribution licenses of Eskom and municipalities. This NERSA exercise raise several concerns: Municipalities are concerned that this ‘due diligence exercise’ by NERSA is predominantly increasing reticulation areas of Eskom; It is a consultation exercise that should involve greater participation. Allowing this process to continue carries risks as it is: Creating irregular conditions for the determination of electricity supply areas between municipalities and Eskom; Exacerbating the stalemate between municipalities and Eskom in terms of municipal constitutional powers for electricity distribution; and Involves a review of Eskom supply areas without resolving the executive authority of municipalities for reticulation in those areas.

Eskom proposed revenue management initiative

SALGA’s position on Eskom proposed revenue management initiative Eskom tabled a revenue management proposal which seeks to make the municipalities owing Eskom to sign a service delivery agreement (SDA) to install smart meters and collect on behalf of municipalities. SALGA and municipalities have for some years requested that Eskom enter into SDA with municipalities, amongst others to address municipal credit control challenges in Eskom supplied areas. This was not approved by Eskom. Should a municipality decide to contract Eskom to provide a revenue collection service, SALGA believe that such an arrangement should be part of a broader SDA (as anticipated in the Municipal Systems Act) and not a separate agreement. SALGA maintains that it does not support the approach where only one challenge is addressed in isolation from other challenges.

Municipalities and renewable energy

Current trends in the sector Energy supply challenges Increasing electricity prices, Decreasing technology costs and increasing product quality, Increase in the consciousness of the benefits of low carbon sources of electricity LEADS TO reduced electricity demand, as consumers: reduce their electricity consumption (energy efficiency), generate their own electricity from small-scale embedded generation, and sometimes even contemplate moving off the grid (this would be the worst case for the electricity distribution industry). AS A RESULT Sales of electricity in the municipalities have shown a consistent downward trend over the past few years and have, in some cases, plummeted significantly.

Municipalities are proactive SMALL SCALE EMBEDDED GENERATION These dynamics have radical implications for local municipalities which compels them to re-define their role in the electricity value chain and adapt their funding and operating models. Municipalities have proactively allowed their customers to generate electricity, mainly through solar panels, and to feed their excess electricity back into the grid. To date, almost 1 out of 6 municipal electricity distributors allow their consumers to install such electricity production facility and 18 municipalities have approved tariffs, applicable specifically to these consumers. SALGA is working actively to ensure that technical and institutional support is provided to all municipalities and that lessons learnt are shared amongst all our members.

Municipalities are proactive RENEWABLE ENERGY GENERATION Example of Municipalities generating their own electricity Solar PV on municipal buildings: Cape Town +/- 250 kWp eThekwini +/- 500 kWp Ekurhuleni: +/- 500 kWp Solar PV in WWTW: Camdeboo: 10.8 kWp Hessaqua: 33 kWp Greening municipal infrastructure: Taxi ranks: Cape Town, eThekwini Green buildings Biogas to energy in WWTW: Johannesburg +/- 2MW biogas to energy Several other projects under appraisal Landfill gas to electricity: Ekurhuleni: 1 MW eThekwini: 7.5 MW Johannesburg: up to 18.6 MW (11.5 MW connected?) – although these form part of REIPPPP … and other existing projects and opportunities However this is small compared to what is needed

BUT THE CURRENT SITUATION for Municipal Electricity Utilities is… MUNICIPALITIES Rapid changes in the industry, Technologies advancement Market driven: the Uberisation of the electricity sector Pressure from customers (alternative technology, own generation, theft and non-payment) Limiting electricity regulations and policies which constrains the capacity of the municipalities to turn opportunities into reality, threatening the sustainability of municipalities Towards a future electricity utility and sustainable municipalities

Municipalities and Renewable Energy PROPOSALS Small Scale Embedded Generation: Legislative changes (amendment of ERA and regulatory rules) are urgently needed. A dialogue is needed on possible review of the current legislative framework and policy recommendations that will enable municipalities to respond more effectively to this transition. New business models options should be explored and inaction cannot be considered as an option. SALGA is willing to lead this national dialogue with the Department of Energy. SALGA is therefore preparing to engage with the department and suggest an initial energy summit as early as February 2018.

Recommended Way Forward:

Possible Interventions Recommended to the PCC on 29 August 2017 Clarify the issue of Municipal Constitutional Powers for the industry – Eskom must recognize the constitutional authority of municipalities and sign the Service Delivery Agreements as per the Systems Act Review the current business models for electricity distribution; Review of the current funding model for local government; National Treasury commission an independent indepth study on owing municipalities to determine if they can realistically honor the Eskom bill and make recommendations Review of Eskom credit control policies Review of the Notified Maximum Demand penalty regimes Repeal historical debts more than 5 years Quantify the percentage of interest in the total debt to Eskom and analyse the implications of waiving some of it Fiscal injections to municipalities who genuinely can’t pay the Eskom debt Some grants needs review or refocus to consider the current realities Sector Department/s must develop local government support strategies and plans in accordance with S.154 of the Constitution, Explore the model of WELL CAPACITATED support agencies to provide technical assistance to struggling municipalities and Put in place robust programmes aimed at eradicating the maintenance and refurbishment backlogs in municipalities.

Thank you