Major ratings upgrade for Eskom

S&P Global has given Eskom several rating upgrades amid an improved performance at the state-owned entity.

Ratings agency S&P Global has upgraded Eskom’s ‘B’ long-term global scale foreign and local currency ratings from stable to positive.

In addition, Eskom’s South Africa national scale issuer credit rating was upgraded from ‘zaBBB’ to ‘zaBBB+’, while the short-term national scale rating of ‘zaA-2’ was reaffirmed.

S&P Global also affirmed Eskom’s ‘B’ issue rating on the group’s senior unsecured debt and the ‘BB-’ foreign currency issue rating on the government-guaranteed debt.

Eskom said that the decisions highlight 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 in July 2023.

The bailout ensures that Eskom will be able to meet its debt servicing and repayment commitments by 2026, which reduces liquidity risks and bolsters the company’s financial stability.

“This upgrade is a clear indicator of the progress we are making in strengthening Eskom’s financial and operational foundation,” said Eskom CEO Dan Marokane.

“It sends a positive message to investors and stakeholders, reinforcing trust in our ability to deliver energy security while driving long-term sustainability.”

“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.”

Eskom said that it will continue to focus on implementing generation recovery, strengthening governance
and tackling crime and corruption while also future-proofing the organisation to enable energy security,
growth.

The news comes amid an over 200-day break from load shedding from the organisation following a 2022 and 2023 characterised by intense power outages.

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