Earlier this month, S&P also revised South Africa's outlook from stable to positive. File Picture: Henk Kruger / Independent Media
International credit ratings agency S&P Global has revised Eskom’s long-term global scale ratings from stable to positive on Wednesday.
Eskom said that it welcomed the upgrade of the entity’s ‘B’ long-term global scale foreign and local currency ratings.
“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,” the state utility said.
“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 said that the decision by S&P illustrated confidence in the impact of the R254 billion financial support package introduced through the Eskom Debt Relief Act.
“This upgrade is a clear indicator of the progress we are making in strengthening Eskom’s financial and operational foundation,” Eskom’s Group Chief Executive, Dan Marokane said.
“It sends a positive message to investors and stakeholders, reinforcing trust in our ability to deliver energy security while driving long-term sustainability,” he added.
“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,” Marokane emphasised.
Earlier this month, S&P also revised South Africa's outlook from stable to positive.
The organisation also affirmed the sovereign’s long-term foreign and local currency debt ratings at ‘BB-’ and ‘BB’, respectively.
S&P has taken note of the increased political stability in South Africa following the formation of the Government of National Unity (GNU), which has created a favourable environment for reform.
This, in turn, is expected to attract more private investment and stimulate economic growth.
"The positive outlook reflects the potential for stronger growth than we expect, alongside government debt stabilisation, if the new coalition government can accelerate economic reforms while addressing infrastructure- and fiscal-related pressures," S&P said.
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