Fitch Ratings keeps Eskom’s rating at ‘B’ with a stable outlook

The electricity supplier said the rating is a testament to its efforts to stabilise the entity’s financial status.

Eskom has welcomed the decision by American credit ratings agency Fitch Ratings to keep the power utility’s rating at ‘B’ with a stable outlook.

The electricity supplier said the rating is a testament to its efforts to stabilise the entity’s financial status.

“The latest decision by the rating agency is an encouragement in the cooperative and ongoing efforts to restore Eskom’s financial stability, improve performance and ensure its long-term sustainability,” Eskom said.

The power utility explained that government’s decision to provide Eskom with debt relief over the next three years proved pivotal.

The decision was made to allow the power utility to stabilise its balance sheet, undertake urgently needed maintenance on power stations, restructure and invest.

“Central to the rating agency’s decision is Eskom’s link to the South African government as a state-owned enterprise. The decision also comes on the back of the debt relief package for Eskom as announced by the Minister of Finance in February this year.

“As stated in the Eskom Debt Relief Bill, government will, over the next three years, provide Eskom with debt relief of R254 billion.

“This will be in the form of advances of R78 billion in 2023/24 financial year, R66 billion in 2024/25 financial year and R40 billion in 2025/26 financial year as well as a takeover of up to R70 billion of Eskom’s loan portfolio in 2025/26 financial year,” Eskom said. 

(With Inputs from South African Government Press Release)