S&P Global Upgrades Eskom's Credit Rating as Turnaround Shows Results

Eskom has received an upgrade to its credit ratings from S&P Global Ratings, moving from B to B+ with a stable outlook, the power utility announced on Tuesday.

Credit Rating Improvement Reflects Operational Progress

The ratings agency has upgraded both Eskom's foreign and local currency long-term credit ratings, citing the measurable impact of the utility's Turnaround Plan. The upgrade also extends to Eskom's senior secured and unsecured debt, while government-guaranteed foreign currency debt was raised from BB- to BB+.

Additionally, Eskom's national scale rating has improved from zaBBB+/zaA-2 to zaAV/zaA-1.

Operational Stability and Financial Recovery

According to Eskom, operational improvements have been substantial, with the utility delivering electricity 97.9% of the time in the current financial year. This marks an improvement from 96% availability in the 2025 financial year.

Perhaps most significantly, the utility reported its first profitable year in eight years during FY2025, signaling a potential turning point in its long-running financial crisis.

Eskom Group Chief Executive Dan Marokane stated: "The Turnaround Plan has been pivotal in restoring Eskom's operational and financial stability. We have moved decisively from a generation crisis to a phase of reliability and disciplined management."

Future Focus Areas

Looking ahead, Eskom indicates it will continue implementing generation recovery initiatives while enhancing governance and combating crime and corruption within the organization.

The utility has also committed to preparing for long-term sustainability and energy security, with the stated aim of supporting South Africa's growth and the broader sub-Saharan region.

Outlook: What This Means for South Africans

While the credit rating upgrade represents a vote of confidence in Eskom's management and financial trajectory, it's important to note that ratings improvements typically take time to translate into consumer benefits.

The improved credit rating could potentially help Eskom secure better financing terms for future operations and capital expenditure, which might eventually contribute to more stable electricity pricing. However, the utility still faces significant challenges including municipal debt, infrastructure renewal needs, and the ongoing energy transition.

The reported 97.9% electricity delivery rate suggests South Africans can expect continued stability in power supply in the near term, assuming no major generation unit failures or unexpected events.

Key Terms Explained

Credit Rating: A grade assigned by rating agencies that indicates the financial reliability of a company or organization. Higher ratings (like B+) indicate lower risk than lower ratings.

Turnaround Plan: Eskom's comprehensive strategy implemented to restore operational stability, improve financial performance, and strengthen governance.

FY2025: Financial Year 2025, referring to Eskom's fiscal reporting period ending in March 2025.

National Scale Rating: A credit rating that allows comparison between entities within South Africa, as opposed to global comparisons.