Grant to fund roll out of prepaid meters
Municipalities that have been approved to participate in a debt relief programme to write off arrears debt owed to Eskom will be the first to benefit from a new conditional grant for smart prepaid meters.
Along with the tabling of the 2024 budget in parliament on Wednesday, the National Treasury announced the R2bn grant that will be distributed over the next three years to fund the rollout of smart prepaid meters by municipalities.
This is one of the amendments the Treasury introduced to conditional grant frameworks “to improve service delivery and address financial pressures in municipalities”.
The grant would initially be made available to municipalities that had been approved for Eskom debt relief, Treasury said.
The R2bn allocated for the grant will be made up of R500m in 2024/25, R650m in 2025/26 and R800m in 2026/27.
The debt relief programme for municipalities that owe arrears debt to Eskom was launched in May 2023. It allows municipalities to have their Eskom debt written off systematically over three years. To qualify, municipalities must comply with 14 financial management and other conditions, which include being up to date with current Eskom payments. Another condition was that municipalities that wish to benefit from the debt relief programme will be expected to progressively install smart prepaid meters and that all new connections must be smart prepaid meters. According to the 2024 Budget Review, 72 municipalities applied for debt relief for arrears debt to Eskom. “By December 2023, 72 applications had been submitted, totalling R56.7bn, or 97% of total municipal debt owed to Eskom at end-March 2023. Seventy applications, totalling R55.2bn, had been approved as of January 2024,” said the Treasury. Debt owed to Eskom by municipalities continued to escalate during the year. By October 2023 this debt stood at R64bn and Eskom projected debt owed by municipalities could increase to R68bn by endMarch 2024.