Eskom scores Fitch upgrade for first time in 16 years

Ratings agency Fitch has upgraded Eskom to ‘B+’ with a stable outlook, marking a significant boost for the power utility.

In a statement issued from Dubai on Friday, Fitch confirmed it had upgraded Eskom Holdings SOC Ltd.’s Long-Term Issuer Default Rating (IDR) to ‘B+’ from ‘B’, with the outlook revised to stable. The agency also upgraded Eskom’s senior unsecured debt to ‘B+’, while its government-guaranteed debt was lifted to ‘BB’ from ‘BB-’.

The move follows Fitch’s recent upgrade of South Africa’s sovereign credit rating on June 5, which has had a direct impact on Eskom’s standing given the utility’s close ties to the government.

Eskom ratings linked to GRE criteria

Fitch said Eskom’s ratings remain closely linked to the South African state under its Government-Related Entities (GRE) criteria. The agency assessed the level of state support as “strong” across all key factors, including oversight, policy alignment and the likelihood of intervention in times of financial distress. This resulted in a support score that positions Eskom’s rating just two notches below that of the sovereign.

Despite the upgrade, concerns around governance and financial transparency continue to weigh on Eskom’s overall credit profile. Fitch flagged governance challenges and historical breaches, which have affected investor confidence and access to capital markets.

The agency also pointed to Eskom’s track record of qualified audit opinions over the past four financial years, as well as delays in publishing interim financial results, as negative factors impacting its rating assessment.

Eskom’s standalone credit profile remains deeply in speculative territory, reflecting its ongoing financial pressures, operational challenges and reliance on state backing.

First ratings improvement since 2010

The latest upgrade is significant as it marks Eskom’s first ratings improvement since 2010, underlining the slow and difficult path to recovery for the utility.

While the improved rating and stable outlook signal growing confidence in state support and fiscal alignment, Fitch stressed that structural weaknesses within Eskom remain a key risk.

The utility continues to play a central role in South Africa’s economy, with its performance closely tied to national growth and energy security.

The upgrade is expected to provide a modest boost to investor sentiment, but sustained improvements in governance, transparency and operational efficiency will be critical if Eskom is to achieve further rating gains.

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Sunday World

Fitch upgraded Eskom’s Long-Term Issuer Default Rating from ‘B’ to ‘B+’ with a stable outlook, marking its first rating improvement since 2010.
Eskom’s senior unsecured debt rating was raised to ‘B+’ and government-guaranteed debt to ‘BB’ from ‘BB-’, influenced by South Africa’s recent sovereign rating upgrade.
Eskom’s rating remains closely tied to the South African government, benefiting from strong state support, though still rated two notches below the sovereign.
Persistent governance issues, financial transparency concerns, and operational challenges continue to weigh on Eskom’s standalone credit profile.
The upgrade signals increased investor confidence but Fitch emphasizes the need for ongoing improvements in governance, transparency, and operational efficiency for future rating progress.

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