South Africa's Eskom the country's utility group has seen an improvement in its creditworthiness with the recent upgrade by S&P Global Rating “B” from “CCC+” over its secured and unsecured debt. The rating firm also upgraded the national scale rating to ‘zaBBB/zaA-2’ from ‘zaB/zaB’.
The South African state utility group has reported losses for six straight years including 23.9 billion rand ($1.2 billion) net loss after tax for the last financial year. The country has been subjected to constant outages needing urgent turnaround for its aging infrastructure, and a huge debt burden.
The Eskom Debt Relief Act was signed into law on 7 July 2023, with a R254 billion financial support package by the South African government that will cover Eskom’s debt servicing and repayment obligations over the current and subsequent financial years. It also reduces the risk of default as Eskom’s liquidity position improves.