Ditsobotla has become the fourth municipality to sign a Distribution Agency Agreement with Eskom, joining Maluti-A-Phofung, Emfuleni and Merafong. Eskom is careful about the framing: it says this is not a takeover of electricity services, that municipalities retain their distribution licences, and that Eskom acts as an agent managing a ring-fenced electricity business, collecting revenue, training municipal staff and maintaining the network.

The agreements are described as time-bound and transitional. AfriForum is in court seeking to have the Merafong agreement declared unlawful and set aside.

Municipal arrear debt to Eskom stood at R111.6bn in May, up from R55.3bn in March 2023 and R94.6bn in March 2025. The debt relief programme launched in April 2023 approved 71 municipalities for conditional write-offs, but only 10 were fully compliant by 30 September 2025, and the arrears of those that failed had grown by R27.57bn since joining.

Whether the agency agreements fix any of this is not yet demonstrated. Maluti-A-Phofung owed R7.3bn in February 2023, and its agreement took effect that September.

By June 2025, the overdue debt had passed R9bn. Payment levels climbed from around 17% to roughly 40% by October 2024, then fell back to 24% or 25% and stayed there. Eskom expects the balance to start dropping in year four.

MyBroadband reports Eskom has set up a dedicated project management office to coordinate the agreements. Moneyweb obtained a statement from NERSA saying none of the agreements have been submitted to it for approval, that it has performed no oversight of their implementation, and that it cannot confirm whether Eskom's handling fees may lawfully be recovered through tariffs. Engineering News reports Treasury has issued termination letters to 13 municipalities and is preparing notices for 14 more, offering five-year agreements as the alternative.

The most serious objection here is not AfriForum's; it is NERSA's. A lobby group alleging procedural irregularity is contestable and will be argued in court. The energy regulator stating on the record that it has never received these agreements, has conducted no oversight of them, and cannot say whether the fees inside them are recoverable through tariffs is a different order of problem, and it holds whatever you think of municipal capacity or of who brought the case.

The operational argument is also still unproven. The longest-running agreement has watched overdue debt climb from R7.3bn to over R9bn while collection rates slid back to a quarter of billings. Eskom may well be right that year four is the turn.

But if you operate in one of these municipalities, plan on the basis that changing who sends the invoice does not fund the metering, credit control and maintenance that actually produce the money.

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