Johannesburg – The statement by Standard and Poor’s (S&P) rating agency on South Africa’s credit ratings confirms the strides made by Eskom in stabilising the power supply, according to the parastatal.
Eskom chief financial officer Anoj Singh said Eskom welcomed the decision by S&P to affirm South Africa’s credit rating at BBB-/A-3 and BBB+/A-2 for long-term and short-term foreign and local currency bond ratings respectively.
“We welcome the affirmation of the sovereign rating by S&P Global. Their statement has confirmed that the strides achieved by Eskom and the country in stabilising electricity supply have contributed to the broader economic initiatives to improve economic growth.
“This decision encourages the positive path that Eskom has embarked on to improve its credit profile and become financially sustainable,” Singh said.
In their statement S&P said they saw “several structural measures as key” in placing South Africa’s economy on firmer footing and had helped it to maintain its investment-grade rating.
The first was provision of a reliable source of energy, “where we [S&P] observed progress”. “Eskom, the state-owned power utility, has improved the energy supply through a better maintenance programme, managing demand in peak periods, and by additions from its new power plants and from independent power producers. The combined measures have helped eliminate load shedding, which was prevalent in the last winter cycle and depressed overall 2015 economic growth,” S&P said.
Singh said Eskom would continue to vigorously ensure that the state of the electricity system remained stable.
“S&P Global had also placed Eskom’s ratings under review so we believe that this decision will bear positive results for Eskom’s credit profile, taking into account Eskom’s extra-ordinary support from government,” Singh said.
African News Agency (ANA)