Pretoria – Eskom has announced changes to its executive committee structure to further strengthen the implementation of its corporate plan.
“Our Design-to-cost (DTC) five-year strategic corporate plan continues to gain momentum as we focus on delivering on our five priority projects. These include increasing demand for electricity, reducing primary energy expenses, implementing advance analytics to deliver savings, releasing government guarantees and optimising our capital expenditure,” said Eskom interim group chief executive Matshela Koko.
Announcing the decision on Wednesday, Koko said the Eskom Board has endorsed the secondment of Abram Masango, currently Group Executive for Group Capital to the Office of the Group Chief Executive, with immediate effect.
In his new role, Masango will assist Group Chief Financial Officer Anoj Singh and Koko with the execution of the 2017/18 corporate plan.
“Masango has the appropriate skills needed to ensure focused execution, with the determined leadership to manage the daunting work ahead,” added Koko.
Prish Govender, currently General Manager for Capital Assurance Integration and Special Projects, will act as Group Executive for Group Capital with immediate effect.
Eskom’s five-year priority projects under the Design-to-Cost project are:
- Increase demand for electricity by increasing local sales by 2.1% year-on-year by the financial year 2019/20 and increasing export sales by 8% year-on-year by the financial year 2020/21;
- Reduce primary energy expenses by R53 billion;
- Advance analytics to deliver savings of R14 billion;
- Release R105 billion government guarantees by financial year 2019/20, and
- Optimise capex by R65 billion.
S&P affirms Eskom credit rating
Meanwhile, credit rating agency Standard and Poor’s (S&P) affirmed Eskom’s credit rating at ‘BB-’.
“S&P has affirmed their ‘BB-’ global scale and ‘zaBB+/ZaB’ national ratings on Eskom; outlook remains negative,” said Eskom.
Citing the implicit strong government support for Eskom through the extension of the R350 billion Guarantee Framework Agreement (GFA) utilisation period to March 2023 from March 2017 as the rationale for the affirmation, S&P also highlighted Eskom’s challenging regulatory environment and its potential risk on the company’s ‘liquidity and ability to service debt’.
“We are pleased by S&P’s decision to affirm our credit ratings. This action demonstrates the positive results that the company has realised from the implemented turnaround strategy; we are acutely aware of the regulatory challenges highlighted in the rating agency’s report and are engaging the National Energy Regulator of SA on this matter.
“We also strongly believe that with the company’s improving operations and financial profile, and ensuring sufficient liquidity; we will address the concerns cited by the rating agency,” said Singh.