Credit rating agency Fitch Ratings has upgraded State-owned Eskom's credit rating to B+ with a stable outlook, up from a B rating, in line with the recent improvement in South Africa’s sovereign credit rating.

Specifically, Fitch upgraded Eskom's long-term Issuer default ratings to B+ with a stable outlook; its senior unsecured debt to B+ with its recovery rating of RR4 unchanged; and Eskom's guaranteed senior unsecured debt to BB from BB-.

Eskom continues to stabilise its operations and strengthen financial management under its ongoing turnaround plan, the utility says.

The relationship between Eskom and the South African government is strong across key support factors, including oversight, policy role, and the precedent of support, with Eskom’s rating positioned below the sovereign in line with this framework.

Eskom views the upgrade as a positive signal of improving macroeconomic conditions and continued recognition of the utility’s central role in South Africa’s energy system.

The utility remains focused on strengthening operational performance, improving liquidity and access to funding, and delivering on its turnaround plan in support of long-term financial sustainability, it says.

It also focuses on how rating agencies view its risk profile, owing to its need to access the capital markets.

“Our focus remains on execution. We continue to implement our turnaround strategy at pace to restore operational and financial stability, maintain energy security and position Eskom for sustainable long-term growth that supports the economy,” says Eskom Group CE Dan Marokane.

“Eskom, and South Africa, now has a stable electricity platform to operate and grow from, which has advanced grid stability, market liberalisation and the integration of renewable energy,” he says.