Fitch Affirms Eskom’s Credit Rating
Global rating agency Fitch has kept Eskom’s long‑term local currency rating at ‘B’ with a stable outlook. The agency also confirmed that Eskom’s senior unsecured debt stays at ‘B’, while its guaranteed debt is rated ‘BB‑’. Eskom’s standalone credit profile remains at ‘ccc+’.
What the Ratings Mean
A ‘B’ rating indicates that Eskom still faces considerable credit risk, but the stable outlook suggests Fitch does not expect the rating to drop in the near term. The ‘BB‑’ rating for guaranteed debt shows a slightly stronger position when backed by government guarantees.
Why Fitch Kept the Stable Outlook
Fitch pointed to two main reasons:
- Improved day‑to‑day operations at the utility.
- Close ties with the South African government, which provide support during tough financial times.
Even though Eskom continues to deal with financial challenges, these factors helped the agency maintain confidence in the utility’s ability to meet its obligations.
Eskom’s Operational Milestone
Eskom recently celebrated a full year without any load shedding – 365 consecutive days of uninterrupted power supply. The last time this happened was in September 2018. The utility called the achievement a “key turning point” and a sign that the grid is moving from recovery to a resilient, high‑performing system.
CEO Dan Marokane’s Comments
Eskom Group chief executive Dan Marokane said reaching the one‑year mark is a major milestone. He emphasized that the company’s focus remains on:
- Improving operations.
- Restoring financial stability.
- Supporting South Africa’s energy needs, including integrating renewable energy sources.
Marokane added that the turnaround plan is central to rebuilding both operational and financial strength, and the load‑shedding‑free year helps boost national confidence and the broader economy.
The Significance of a Year Without Load Shedding
For many South Africans, load shedding meant disrupted daily life, lost productivity, and added stress on households. A full year of steady power:
- Restores trust in the electricity supply.
- Supports businesses and industries that rely on consistent power.
- Creates a better environment for renewable energy projects to connect to the grid.
Eskom views this period as more than just an operational win; it is a step toward rebuilding the country’s confidence in its energy future.
Looking Ahead: Renewables and Financial Stability
Eskom’s plan includes:
- Gradually adding solar, wind, and other renewable sources to the mix.
- Upgrading infrastructure to reduce technical losses.
- Continuing efforts to improve cash flow and reduce debt.
If the utility can keep improving its operations while securing government support, Fitch’s stable outlook could eventually lead to an upgrade in the ratings.
Conclusion
Fitch’s decision to keep Eskom’s rating at ‘B’ with a stable outlook reflects cautious optimism. The utility’s recent success in eliminating load shedding for a full year shows real progress in operations. With continued focus on financial health, renewable integration, and government backing, Eskom aims to turn this milestone into a lasting foundation for a stronger, more reliable power system in South Africa.
