The Treasury has made it clear that Eskom’s existing R350bn guarantee facility cannot be stretched to cover a new nuclear-build programme. But it has confirmed that the facility, whose March 2017 expiry date prompted rating agency S&P Global to downgrade Eskom’s rating deep into junk territory last week, will be extended to cover the much-delayed new power stations Eskom is already building. S&P downgraded Eskom’s rating from an already sub-investment grade BB+ to just BB, citing the utility’s dispute with the regulator over electricity tariffs as well as the expiry of the guarantee line in March 2017. The downgrade came ahead of S&P’s scheduled update of SA’s sovereign rating on Friday, raising fresh fears in the market it might presage a downgrade. However, S&P analyst Mashiyane Mabunda said this week the agency had been required to review Eskom by the end of November, in line with European and SA rules. RMB analyst Elena Ilkova cautioned, however, that another downgrade to Eskom’...
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