Historic Agreement: Eskom and Merafong Sign DAA to Fortify Electricity Infrastructure and Fiscal Stability
- Karen Scheepers
- Dec 10, 2025
- 3 min read
The Merafong City Local Municipality and Eskom jointly announced the official signing of a Distribution Agency Agreement (DAA) on Monday, December 8, 2025, at the Merafong Council Chambers. This historic event represents a crucial cooperative measure, signaling a new era focused on improving operational efficiency, enhancing service delivery, and ensuring a consistent and reliable electricity supply for all Merafong communities.
Strategic Rationale: Addressing Financial and Operational Strain
The DAA forms a key pillar of Merafong Municipality’s broader turnaround strategy, which is aimed at stabilising electricity infrastructure, improving financial management, rebuilding public trust, and supporting local economic development. The agreement is a direct response to addressing challenges of municipal financial distress. Specifically, this includes the growing municipal debt owed to Eskom, which exceeded R1.6 billion as of September 2025. The DAA is part of Eskom’s broader proactive approach to supporting municipalities experiencing operational inefficiencies, weakened revenue collection, and financial sustainability issues related to electricity delivery.
Merafong City becomes the third municipality in the country to sign a DAA with Eskom, following Maluti-a-Phofung in the Free State and Emfuleni in Gauteng. Merafong City entered into this agreement, which represents a strategic and transitional intervention designed to stabilise electricity distribution and strengthen governance. It also aims to improve revenue collection while ensuring consistent and reliable power supply for residents and businesses.
Key Provisions and Governance under the DAA
The DAA introduces fundamental improvements intended to strengthen the resilience and accountability of Merafong’s electricity distribution system. Under the agreement, the following structured framework will be implemented:
Coordinated Management: Electricity distribution and certain retail functions will be jointly managed in a structured framework.
Revenue Ring-Fencing: Billing and revenue collection will be ring-fenced and administered through Eskom systems. The signing of this DAA is a critical step towards stabilising electricity distribution and improving revenue collection to enable the Municipality to pay for electricity for its citizens.
Capacity Support: Merafong will retain the electricity licence holder status, with Eskom providing technical expertise, operational support, and skills transfer.
Infrastructure Improvement: The DAA includes strengthened operational coordination between Eskom and the Municipality, improved maintenance processes, fault-response times, and enhanced infrastructure planning and investment readiness.
Service Accountability: There will be clearer responsibilities, regulated lines, and accountability mechanisms, leading to greater stability and predictability of electricity supply.
Social Support: Free Basic Electricity will be disbursed directly by Eskom to qualifying indigent households.
Job Protection: The agreement includes the protection of existing jobs and structured training for municipal employees.
Long-Term Fiscal Stability: Long-term structural reforms will continue through National Treasury to support municipal fiscal sustainability.
Commitment and Next Steps
The signing ceremony was attended by the Municipal Manager, Dumisani Mabuza, senior executives of Merafong City, and senior Eskom leadership led by the Gauteng Cluster General Manager, Bandile Jack.
Speaking at the ceremony, Mr. Mabuza emphasised Merafong's commitment to stabilising infrastructure and restoring public confidence. He stated that the document represents a shared commitment to strengthening the electricity network and ensuring that residents receive the stable and reliable services they deserve. Mr. Jack thanked both teams for their collaboration and emphasised that Eskom looks forward to the positive results this partnership will yield for both organisations and the communities they serve.
Eskom Acting Group Executive for Distribution, Agnes Mambo, noted that this partnership demonstrates Eskom's commitment to work collaboratively and proactively with municipalities to restore operational efficiency and ensure sustainable service delivery.
Both Eskom and Merafong City Local Municipality reaffirmed their commitment to transparent communication, operational collaboration, and improved service delivery. The Municipality extended its appreciation to all stakeholders, officials, and community representatives for their contributions that made the signing ceremony a success.
Paving the Way for Stability and Growth
The official signing of the Distribution Agency Agreement represents a critical institutional intervention designed to address Merafong's substantial financial and infrastructure challenges. By mandating revenue ring-fencing and integrating Eskom's technical and operational expertise, the DAA establishes a decisive step toward stabilising the local electricity supply, improving financial sustainability, and fostering a responsive service delivery model necessary for sustained community and economic development.
⚡️🤝💰✅
Comments