The City of Johannesburg will allocate approximately R28.3 billion in operating expenditure to City Power and a capital programme of R6.7 billion for the medium term to strengthen electricity infrastructure. This was announced on Tuesday, 27 May 2026, during Executive Deputy Mayor and Member of Mayoral Committee for Finance, Cllr Loyiso Masuku's R97.1 billion budget speech for 2026/2027.
“These resources will support grid strengthening, smart metering, electricity loss reduction, informal settlement electrification, public lighting, embedded generation and renewable energy projects," Cllr Masuku said.
According to Cllr Masuku the City is finalising development finance linked to energy projects, including a recent council approved loan facility from KfW Development Bank, German state-owned development and promotional bank, worth about €200 million (R3.8 billion) to support City Power's infrastructure pipeline.
Cllr Masuku noted that the City is currently in discussions with Eskom on the current debt and recovery interventions with the support and collaborative efforts from national government, SALGA, regulators and financial institutions.
“Energy reform is not optional – it is central to Johannesburg's economic survival. We welcome the ongoing open dialogue between the Minister of Electricity and Energy Dr Kgosientsho Ramokgopa, Eskom Group Chief Executive Officer Dan Marokane and ourselves the City of Johannesburg."
She said Johannesburg is not a failed city, but a city under pressure. In Johannesburg 92% of residents have access to electricity. She further also stated the difficult truth. “Johannesburg's combined infrastructure backlog is estimated at over R220 billion. Non-revenue water losses stand at 44.7% and electricity losses at 27%. No honest budget speech can avoid these facts. Johannesburg cannot budget its way out of a R220 billion infrastructure backlog through municipal resources alone."
City Power is among the City's core trading services and is weakened by declining revenue. Electricity distribution losses stand at 27%. The combined infrastructure renewal backlog across Johannesburg Water, City Power and Johannesburg Roads Agency (JRA) exceeds R185 billion.
Cllr Masuku further stated City Power proposes an overall average tariff increase of 9.01% which is consistent with Eskom's bulk purchase cost increase.
“City Power's Cost of Supply Study confirms that reducing energy losses from approximately 27% to 15% would alone generate additional revenue of up to R3.5 billion – without further tariff increases. This is why the Trading Services Reform programme is central to City Power's financial sustainability," Cllr Masuku said.
A total budget of R 97.1 billion was tabled for the next fiscal year. Our key revenue drivers are Electricity (R27.8 billion), Water & Wastewater (R21.5 billion), Property Rates (R18.8 billion), and Refuse Removal (R3.6 billion).
Read the speech here: 2026 Budget Speech
Written by Brümilda Swartbooi
27/05/2026
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