Smart meter programme to tackle municipalities Eskom debt

The National Treasury has set a target to install 250 000 smart electricity meters by the end of the 2027 financial year. This indirect grant programme is part of R2 billion debt relief programme that’s meant to be a mechanism to help eligible municipalities pay their debts to Eskom that has reportedly crept close to the R100 billion mark. The meter system allows the utility to be paid directly, bypassing the municipalities.

This comes as the auditor general has once again, in 2025, flagged that municipalities across the country are floundering. Only 16% of municipalities had clean audits.

Soaring municipal debt and the inability to arrest the root causes for poor financial management are among the key challenges for local governments. The knock-on effects of debt also mean state utilities, including Eskom, are negatively impacted. And in turn this adds to more instability, more service disruption and more people falling through the cracks.

One measure the National Treasury has been exploring involves setting a target to install 250 000 smart electricity meters by the end of the 2027 financial year that is hoped to improve billing, reading and revenue collection. The installation of meters form part of the indirect grant programme. This 2 billion has to date seen 67 000 meters being installed, that according to Engineering News is costing government  R7 462.70 per meter.

This municipal debt relief programme is meant to be a mechanism to help eligible municipalities pay their debts to Eskom that has reportedly already crept close to the R100 billion mark. The meter system will allow the utility to be paid directly, bypassing the municipalities.

The project was rolled out in the 2024/25 financial year staring with eight municipalities and has been expanded to included 19 municipalities.

Municipalities’ debt burdens are attributed to range of factors from incompetent financial management, poor revenue collection, fewer people being able to pay for services, including electricity, and widespread corruption in municipalities.

The 2024-2025 auditor general’s report on the performance of local government again showed poor governance and financial municipality reflected in the low number of clean audits. Only 16% of 257 municipalities had clean audits. The Auditor General, Tsakani Maluleke, called out once again the likes of lack of fiscal discipline, poor financial decisions and non-compliance with legislation.

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