ActionSA has strongly condemned the proposed R3.8 billion loan from German state development bank KfW, which the ANC-led coalition is seeking council approval to secure for City Power. The party’s Joburg mayoral candidate, Herman Mashaba, says the deal will deepen the city’s already dire financial crisis rather than resolve it.
The loan, valued at €200 million, would bind Johannesburg to a 15-year repayment plan, with funds earmarked for City Power’s electrical infrastructure across the 2025/26 to 2027/28 financial years. Mayor Dada Morero revealed the arrangement at his State of the City Address earlier this month, saying the city and City Power were currently finalising the contract with KfW and expected the funds to be disbursed before the end of June 2026.
Financial Crisis in Joburg
But ActionSA is having none of it. Mashaba described the move as a ‘superficial and frenzied attempt to repair the mismanagement of the City of Joburg’s finances,’ saying it ‘will not improve electricity supply’ but instead ‘entangle the residents in an unaffordable loan agreement over a period of 15 years.’ The controversy comes against the backdrop of a city in visible financial distress. Eskom says the City of Johannesburg and City Power currently owe more than R5 billion in arrears, with a further R1 billion due on June 5, 2026.
According to the Eskom website, the metro has until 8 July to clear its arrears or face disconnections, a threat that could plunge residents into darkness during the height of winter. The scale of the city’s financial troubles goes beyond just its Eskom debt. Mashaba’s statement pointed to over R23 billion in unauthorised, fruitless, irregular, and wasteful expenditure; a R71 billion debt owed by residents, businesses, and government departments due to weak revenue collection; and an unfunded R10 billion wage agreement with unions that National Treasury has instructed the city to halt.
Concerns Over Governance
Adding to concerns about governance, Mashaba highlighted that the extraordinary council sitting to approve the loan was convened without councillors having been presented with audited financial statements for the 2024/25 financial year. ‘By law, financials should be submitted to Council by the end of January and approved by the end of February,’ his statement noted, calling it ‘astonishing’ that this had not happened.
Some of the key issues with the proposed loan include:
- Lack of transparency in the loan agreement
- Unsustainable repayment plan
- Insufficient funds for electrical infrastructure
Finance Minister Enoch Godongwana has also weighed in on the city’s troubles, with a letter dated April 23, 2026, in which he bluntly stated that the city is ‘effectively’ bankrupt, though Morero has since disputed that characterisation, saying Godongwana relied on incorrect financial reports. For ActionSA, the deeper problem is one of leadership, not liquidity. ‘Johannesburg does not have a financing problem,’ Mashaba said. ‘It faces a negligence and mismanagement crisis,’ as stated on the National Treasury website.
