The Ditsobotla Local Municipality signed a formal Distribution Agency Agreement (DAA) with Eskom on 24 July 2026, marking a significant step to address the municipality’s outstanding debt of approximately R1.7 billion. The agreement enables the state-owned power utility to assume direct control over electricity revenue collection and technical management within the municipality.
Addressing Structural Financial Mismanagement
The intervention comes after years of severe financial distress characterised by creditor payment periods exceeding 3,000 days and significant electricity distribution losses, which have been reported at 85%. National Cabinet Representative Kopung Ralikontsane, assigned to assist the municipality under a national financial intervention, highlighted the unsustainable practice of diverting electricity revenue to fund other municipal obligations.
“Ditsobotla has not been paying. They don’t have money to pay and service the debt and because they didn’t service the debt, the debt was growing. That is the current situation. Even now, we survive on equitable share,” Ralikontsane said at a recent media briefing. “We were actually stealing from Peter to pay Paul – stealing money from Eskom with the electricity that they’ve given us so that we can service our other responsibilities.”
Recovery Efforts and National Oversight
This partnership is part of an broader strategy to stabilise the municipality, which has been under national administration since local leadership failed to manage its financial affairs. Finance Minister Enoch Godongwana delivered a revised Financial Recovery Plan to the municipality in June 2026, which is designed to address a critical R2.1 billion cash shortfall. By ring-fencing electricity revenue through this agency agreement, the government aims to ensure that bulk electricity supply remains consistent while gradually settling the long-standing debt arrears. Authorities expect the handover of managerial responsibilities to Eskom to improve operational efficiencies and restore reliable service delivery for the residents of Lichtenburg and the surrounding areas.