In a country where electricity dramas are an everyday topic, there’s finally some good news.

City Power and Eskom—two key players in South Africa’s power game—have come to a resolution after a long-standing dispute over billing and outstanding debt. And yes, it involves billions.

What Was the Dispute About?

For quite some time now, City Power and Eskom have been at odds over how much was actually owed for bulk electricity supply.

The back-and-forth included disagreements on the debt figure, penalties, and how Eskom charged City Power—especially during those brutal winter months when electricity demand spikes.

City Power Agrees to Pay, Eskom Wipes Away R830 Million

In a press briefing on Tuesday, the Minister of Electricity and Energy, Dr. Kgosientsho Ramokgopa, announced a significant agreement. Here’s the breakdown:

City Power will repay Eskom R3.2 billion over the next four years
Eskom will write off R830 million in penalties and interest

That write-off covers a few things: late payment interest, penalties related to over-usage, and inaccurate load-shedding estimations.

Essentially, Eskom has agreed to loosen the grip to help ease the financial strain on City Power.

Winter Tariffs Have Been a Major Pain Point

One of the key concerns was how much electricity costs during winter.

With time-of-use tariffs, the charges spike during colder months when everyone’s cranking up the heaters.

Dr. Ramokgopa acknowledged that winter electricity costs have made it almost impossible for households and businesses to keep up.

That’s why the new agreement includes a bit of breathing room for City Power on its R3.2 billion repayment—especially during winter.

A Potential Blueprint for Other Municipalities

The minister was hopeful that this deal could be the start of something bigger.

He hinted that this agreement could serve as a template for other municipalities struggling with Eskom-related debt.

He even mentioned a similar situation already unfolding in Tshwane.

“If municipalities come forward, we’re open to discussions on how to provide some form of relief,” Ramokgopa said.

“But of course, Eskom still has a job to do—generating electricity isn’t cheap, and they need to recover those costs from the end user.”

A Win-Win or Just Delayed Pressure?

Whether this resolution is a true win-win or just a temporary bandage remains to be seen.

On the one hand, it gives City Power some breathing space.

On the other, Eskom still needs money to keep the lights on—literally.