Johannesburg: Global ratings agency Moody's Ratings has affirmed Eskom's B2/Ba2 credit ratings with a stable outlook. This announcement comes shortly after another credit rating agency, Fitch, also confirmed Eskom's Local-Currency Issuer Default rating at 'B' with a stable outlook.
According to South African Government News Agency, Moody's reaffirmed Eskom's various ratings including the B2 long-term corporate family rating, B2-PD probability of default rating, and B2 senior unsecured notes ratings. They also maintained the (P)B2 rating on the global medium-term notes programme, caa1 baseline credit assessment, and Baa3.za national scale corporate family rating. Additionally, Moody's upheld the Ba2 backed senior unsecured ratings on notes benefiting from a government guarantee, which is both unconditional and irrevocable.
Eskom's Group Chief Executive, Dan Marokane, expressed that the utility is committed to its turnaround plan aimed at restoring operational and financial stability. He highlighted a significant milestone reached earlier this month, noting one year without loadshedding, which contributes to grid stability, energy security in South Africa, market liberalisation, and the integration of renewable energy for economic growth in South Africa and Sub-Saharan Africa.
The power utility attributed Moody's affirmation to improved operational performance, strengthened cash flow generation, and an enhanced liquidity position, supported by government debt relief measures. Eskom also acknowledged ongoing constraints identified by the rating agency, such as rising municipal debt arrears, regulatory challenges with tariffs, substantial capital expenditure needs, and risks related to the ongoing unbundling process.