Following the affirmation of the sovereign credit rating by Moody’s Investors Service (Moody’s) last week, the ratings agency has moved to affirm Eskom’s credit rating of Ba1, with a negative outlook.

In March 2015, Moody’s had placed Eskom on review for a potential downgrade. That has now been averted with the affirmation of the Ba1 credit rating, indicating the possibility for the Eskom’s outlook to be revised to stable if the company continues to improve and stabilise its operational and financial performance.

Moody’s cited Eskom's strategic importance to the government's social and economic policy, and a prospect of a high level of government support in the event of financial distress, as a basis for its decision to affirm Eskom’s credit rating.

To date, Eskom has received financial support from the South African Government in the form of a R350-billion Government Guarantee Framework Agreement, R60-billion shareholder loan which was converted into equity in 2015, and the recent R23-billion equity injection received by the company in the 2015/16 financial year.

“We are pleased that the rating agency has affirmed Eskom’s credit rating. Removing Eskom from a review for downgrade status demonstrate the commitment by Eskom and the government to stabilise the company’s operational and financial profile.  Eskom will continue to implement initiatives that will ensure that the company achieves long-term financial sustainability while moving towards an improved credit profile”, said Anoj Singh, Eskom’s Chief Financial Officer.

Issued by Eskom