Cape Town - Eskom says it will continue to ensure a stable supply of electricity in the country after S&P Global affirmed South Africa’s credit rating on Friday.
South Africa’s credit rating stands at BBB-/A-3 and BBB+/A-2 for long term and short term foreign and local currency bond ratings respectively. The foreign currency bond rating remains one notch above sub-investment grade whereas the domestic currency bond rating remains three notches above sub-investment grade.
“We welcome the affirmation of the sovereign rating by S&P Global," said Eskom chief financial officer Anoj Singh.
He said the ratings agency's statement confirmed that the strides achieved by Eskom and the country in stabilising electricity supply have contributed to the broader economic initiatives to improve economic growth.
"This decision encourages the positive path that Eskom has embarked on to improve its credit profile and become financially sustainable.”
In their statement S&P Global states that they saw “several structural measures as key” in placing South Africa’s economy on firmer footing and helped it to maintain its investment-grade rating as follows: “the first is provision of a reliable source of energy, where we observed progress. Eskom, the state-owned power utility, has improved the energy supply through a better maintenance programme, managing demand in peak periods, and by additions from its new power plants and from independent power producers. The combined measures have helped eliminate load shedding, which was prevalent in the last winter cycle and depressed overall 2015 economic growth.”
Singh said the power utility will continue to ensure that the state of the electricity system remains stable.
"S&P Global had also placed Eskom’s ratings under review so we believe that this decision will bear positive results for Eskom’s credit profile, taking into account Eskom’s extra-ordinary support from government,” he said.