JOHANNESBURG – Eskom says it will learn from concerns raised by ratings agency Standard & Poor’s Global, and will correct itself.
The agency has reduced the power utility’s long-term corporate credit rating from Baa2 to BBB-.
The rating agency has cited the increased financial pressure faced by Eskom due to the uncertain tariff path resulting from the ongoing court case against the National Energy Regulator of South Africa (Nersa).
It has also expressed concern over uncertainty around government’s framework agreement, which will expire at the end of March.
Eskom’s Khulu Phasiwe says, “So, things are gradually turning around for us but things which are outside of our influence, there’s not much we can do [about]. But hopefully the government itself will make a pronouncement very soon about the guarantees that they extend to companies like Eskom and other state-owned companies.”
He says, “But the issues around the political climate in the country, hopefully there will be some pronouncement there on, and what we’re going to do going forward.”
Credit ratings firm Moody’s Investors Service kept South Africa’s sovereign rating unchanged at Baa2 on Friday, two levels above sub-investment grade, with a negative outlook.
Africa’s most industrialised country, which is expected to see economic growth of around 0.5 percent half a percent this year, has been trying to avert a sovereign rating downgrade to junk status that would raise borrowing costs and deter investment.