Eskom credit rating secure, but on condition of 12 percent tariff increases


Issue 289 - 20 Nov 2014 | 4 minute read

Credit ratings agency Standard & Poor’s (S&P) has decided against lowering Eskom’s BBB- credit rating for the time being, but remains concerned about risks associated with the government rescue programme and the increasing costs and tight generation margin in the South African power sector. The ratings agency said the government support plan would “support Eskom’s liquidity and stabilise its credit metrics over the near term”. However, S&P’s base case assumes an annual tariff increase of 12% until 2018, which would be unpalatable to many South African consumers and lobby groups.

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