S&P changes Eskom’s outlook from stable to negative

2 April 2012 – Following the revision by Standard & Poor’s (S&P) of the South African Sovereign credit outlook from stable to negative, S&P has revised the outlook on Eskom’s rating from stable to negative and affirmed the BBB+ long term rating of the company.

S&P has concluded that Eskom’s stand-alone credit profile should be maintained, even though Eskom will take longer to achieve cost-reflective tariffs given the recent announcement by the National Energy Regulator of South Africa (NERSA) that it had granted Eskom a reduced tariff increase of 16% as opposed to the originally approved 25.9% for the 2012/13 financial year.

Paul O’Flaherty, Eskom finance director says, “We are comfortable with S&P’s analysis of the challenges facing Eskom and their acknowledgement of the steps we are taking, with the support of government, to move responsibly towards more sustainable credit parameters.