Kgosientsho: Kudos to Eskom for rating upgrade

S&P Global has changed the power utility’s outlook to positive.

South Africa’s national power utility Eskom received praise from Energy and Electricity Minister Kgosientsho Ramokgopa on Wednesday for a credit rating upgrade from S&P Global Ratings.

“Kudos on the well-deserved credit rating upgrade … This positive outlook reflects the collective efforts in strengthening Eskom’s financial stability and operational efficiency,” the minister said on social media platform X.

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On Wednesday, 27 November 2024, South Africa was at 246 days of no load shedding, signalling that Eskom has turned a corner in its quest to provide uninterrupted power supply.

Rating decision 

Eskom announced S&P’s rating decision in a statement early on Wednesday. The rating agency upgraded Eskom’s B long-term global scale foreign and local currency ratings from stable to positive.

In addition, S&P affirmed Eskom’s B-issue rating on the group’s senior unsecured debt and the BB foreign currency issue ratings on government-guaranteed debt.

Read: No load shedding until 2029 – key report

Furthermore, Eskom’s South Africa national-scale issuer credit rating was upgraded to zaBBB+ from zaBBB, with the short-term national scale rating of zaA-2 reaffirmed.

According to S&P’s guide on rating scales, a BBB rating indicates “adequate capacity to meet financial commitments, but more subject to adverse economic conditions”. A “plus” (+) or “minus” (-) in a particular rating category reflects the relative standing within the major rating category.

An A-rating shows a strong ability to meet financial commitments, although the entity is “somewhat susceptible” to economic conditions and changing circumstances.

Dan Marokane, Eskom group CEO, reacted to the decision by saying that the upgrade is a clear indicator of the progress Eskom is making in strengthening its financial and operational foundation. “It sends a positive message to investors and stakeholders.”

Read: Inside Eskom’s stunning load shedding turnaround

New cohort of paying customers

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Meanwhile, Eskom has received another “windfall” in that it managed to bring around 400 000 previously “zero-buyers” into its payment system. They are now paying customers.

Read: Eskom urges customers to recode prepaid meters

This was after the power utility successfully converted and updated its prepaid meters in the so-called Key Revision Number (KRN) 2 rollover project. Eskom started a public awareness programme for the meter rollover project last year.

In a separate media statement, Eskom says it started with a customer base of 6.91 million prepaid customers before the completion of the project. After a data cleaning exercise, Eskom’s customer base now stands at 7.25 million.

“As of 24 November 2024, approximately 5.5 million customers (which includes the around 400 000 zero buyers who have become paying customers) have successfully rolled over and are transacting on KRN 2,” Eskom notes.

According to the power utility, it has seen a decrease in the “zero-buyer” numbers to around 1.7 million – down from the previous 12 months’ rolling average of 2.1 million.

Listen: Joburg prepaid electricity consumers await outcome of R200 review

Eskom urges the approximately 1.7 million remaining “zero-buyers” to “do what is right” by Friday, 13 December 2024″ and report to an Eskom centre.

Monde Bala, Eskom’s group executive for distribution, says the power utility will treat zero-buying customers with dignity and respect and help to resolve all their issues, be it because of a “lost, bypassed, or tampered meter”.

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