- Moody’s has affirmed Eskom’s B2 long term corporate family rating and maintained a stable outlook.
- Improved operational performance, stronger cash flow generation and government debt relief supported the decision.
- Ongoing challenges include rising municipal debt, tariff pressures, capital expenditure needs and unbundling execution risks.
Moody’s Ratings has affirmed Eskom’s B2 long term corporate family rating, B2 probability of default rating, B2 senior unsecured notes ratings, (P)B2 rating on its global medium term notes programme, caa1 baseline credit assessment and Baa3.za national scale corporate family rating.
The rating agency has maintained a stable outlook and also affirmed the Ba2 backed senior unsecured ratings on notes that benefit from an unconditional and irrevocable South African government guarantee.
According to Moody’s, the rating affirmation reflects Eskom’s improving operational performance, stronger cash flow generation and enhanced liquidity position. The agency noted that these gains have been supported by the South African government’s debt relief programme, which has helped strengthen the utility’s financial position.
Despite the positive developments, Moody’s highlighted several ongoing challenges facing the utility. These include increasing municipal debt arrears, regulatory constraints linked to electricity tariffs, substantial capital investment requirements and execution risks associated with Eskom’s ongoing unbundling process.
Eskom Group Chief Executive Officer Dan Marokane said the utility remains focused on implementing its turnaround strategy to restore long term operational and financial stability.
Marokane noted that Eskom recently achieved a full year without loadshedding, a milestone that supports grid stability and strengthens South Africa’s energy security. He added that improved system performance is also helping to advance electricity market liberalisation and the integration of renewable energy, creating a stronger platform for economic growth in both South Africa and the wider Sub Saharan African region.
The latest rating affirmation signals continued confidence in Eskom’s recovery trajectory, while underscoring the importance of sustaining operational improvements and addressing the structural challenges that continue to weigh on the utility’s long term credit profile.
Author: Bryan Groenendaal
