- Fitch Ratings upgrades Eskom’s Long Term Issuer Default Rating to B+ from B with a Stable Outlook.
- Upgrade follows the recent improvement in South Africa’s sovereign credit rating and reflects strong government support.
- Eskom says operational stability, stronger financial management and ongoing turnaround efforts are supporting its long term sustainability.
Eskom has welcomed a decision by Fitch Ratings to upgrade its credit ratings following the recent improvement in South Africa’s sovereign credit profile.
The ratings agency upgraded Eskom’s Long Term Issuer Default Rating to B+ from B and affirmed a Stable Outlook. Fitch also upgraded the utility’s senior unsecured debt rating to B+ from B, while maintaining its Recovery Rating at RR4. Guaranteed senior unsecured debt was upgraded to BB from BB-.
According to Fitch, the rating action reflects Eskom’s close relationship with the South African government under its Government Related Entities rating methodology. The agency cited strong links between the utility and the state, including government oversight, Eskom’s strategic policy role and a well-established record of state support.
The upgrade comes as Eskom continues to improve operational performance and strengthen financial management through its turnaround programme. Fitch noted that Eskom’s rating remains positioned below that of the sovereign, consistent with its assessment framework for government related entities.
Eskom Group Chief Executive Dan Marokane said the utility remains focused on implementing its turnaround strategy to secure long term operational and financial stability.
“Our focus remains on execution. We continue to implement our turnaround strategy at pace to restore operational and financial stability, maintain energy security and position Eskom for sustainable long term growth that supports the economy,” said Marokane.
He added that South Africa now has a stable electricity platform that can support economic growth while enabling grid stability, electricity market reform and the integration of renewable energy.
Eskom said the rating upgrade reflects improving macroeconomic conditions and continued recognition of the utility’s critical role in South Africa’s energy sector.
The utility remains focused on improving operational performance, strengthening liquidity, maintaining access to funding and delivering on its turnaround objectives to support long term financial sustainability.
The improved rating is also expected to strengthen investor confidence as Eskom continues to access capital markets to fund its operations and future investment requirements.
Author: Bryan Groenendaal
