- Utility settles long term ES26 bond valued at R38 billion after 19 years.
- Move signals improved financial governance and reduced borrowing risk.
- Strong investor support sustained through 53 bond tranches and multiple issuances.
South Africa’s state owned power utility Eskom has successfully redeemed its ES26 bond, marking a significant step in its financial recovery strategy and efforts to rebuild investor confidence.
The ES26 bond was first issued in March 2007 with an initial tranche of R500 million at a coupon rate of 7.85%. Over a 19 year period, the bond grew to an outstanding value of about R38 billion, supported by consistent demand from investors and a diversified issuance strategy.
Eskom Group Chief Executive Dan Marokane said the redemption reflects the utility’s ongoing turnaround and commitment to disciplined financial management. He noted that structured support under the Debt Relief Act, combined with improved year on year financial performance, has enabled Eskom to meet its obligations while strengthening market confidence.
The ES26 bond programme included 30 public auctions that raised about R9 billion, with the remaining balance secured through reverse enquiries and liability management issuances. In total, 53 tranches were listed, positioning the instrument as a benchmark in South Africa’s domestic bond market.
The bond’s significance was recognised early on when it received the JSE Spire Award for Best Bond Issue, highlighting its role in advancing local capital market development.
Market analysts view the redemption as a structural gain for the South African economy. By settling a large-scale debt obligation, Eskom is expected to reduce its risk premium, which could translate into lower borrowing costs in future funding rounds.
Despite this milestone, Eskom continues to face challenges linked to ongoing energy sector reforms. The utility is maintaining focus on revenue collection and operational efficiency to ensure long term sustainability and a stable, affordable electricity supply.
Author: Bryan Groenendaal
