Eskom has responded positively to Fitch Ratings’ decision to affirm the utility’s long-term local currency issuer default rating at ‘B’ with a stable outlook.
The ratings agency on May 30 announced its decision, basing it primarily on Eskom’s link to national government as a State-owned enterprise and the debt relief package government has committed to provide to Eskom.
Finance Minister Enoch Godongwana announced in his Budget speech in February that National Treasury would pay down R254-billion of Eskom’s debt over the next three years.
This will be in the form of advances of R78-billion in the 2023/24 financial year, R66-billion in the 2024/25 financial year, and R110-billion in the 2025/26 financial year, the latter of which comprising a R40-billion advance and taking over of R70-million of the loan portfolio.
Eskom considers Fitch’s rating decision to be an encouragement of the cooperative and ongoing efforts to restore Eskom’s financial stability, operational performance and long-term sustainability.