- South Africa’s state owned energy utility, Eskom, has welcomed the announcement by S&P Global Ratings (“S&P Global”) upgrading Eskom’s ‘B’ long-term global scale foreign and local currency ratings from stable to positive.
- S&P also affirmed Eskom’s ‘B’ issue rating on the group’s senior unsecured debt and the ‘BB-’ foreign currency issue ratings on the government guaranteed debt.
- Furthermore, Eskom’s South Africa national scale issuer credit rating was upgraded to ‘zaBBB+’ from ‘zaBBB’, with the short-term national scale rating of ‘zaA-2’ reaffirmed.
- Eskom debt has unsustainable debt of over R400 billion. Read more
This decision reflects S&P Global’s confidence in the impact of the R254 billion financial support package introduced through the Eskom Debt Relief Act, signed into law on 7 July 2023. This package ensures Eskom can meet its debt servicing and repayment commitments through 2026, significantly reducing liquidity risks and bolstering the company’s financial stability.
Related news: Eskom municipal debt now at around R90 billion
“This upgrade is a clear indicator of the progress we are making in strengthening Eskom’s financial and operational foundation. It sends a positive message to investors and stakeholders, reinforcing trust in our ability to deliver energy security while driving long-term sustainability,” said Eskom’s Group Chief Executive, Dan Marokane.
Related news: Eskom reported a net loss of R23.9 billion in their most recent AFS
“Our success in improving generation performance and achieving over R16 billion in diesel savings highlights the efficiency gains we are driving. Sustaining this momentum will support Eskom’s path to profitability and reduce our reliance on fiscal support in the future” added Marokane.
This credit rating upgrade underscores the progress made in restoring Eskom’s financial health and operational reliability. Eskom is committed to delivering on its mandate to power South Africa’s economic future while creating value for all stakeholders.
Eskom says they will continue to focus on implementing generation recovery, strengthening governance and tackling crime and corruption while future-proofing the organisation to enable energy security, growth, and long-term sustainability for the benefit of South Africa and sub-Saharan Africa.
Author: Bryan Groenendaal
