“The upgrades reflect a re-calibration of the higher end of the South African National Rating scale,” said Fitch in a statement.
Fitch further cited that Eskom’s ratings continue to reflect the strong government support including the direct government guarantees and that their outlook remains stable.
In 2011, the South African government increased guarantees awarded to Eskom from 176 billion rand to 350 billion rand of which 138 billion rand has been utilised.
Brian Dames, Eskom chief executive stated that the company welcomed Fitch’s upgrade and that it would assist in them accessing funding in capital markets and improve investor confidence.
“The positive rating action is very helpful at this critical time as Eskom continues to execute the current build programme. A positive rating adjustment will assist Eskom in accessing funding in capital markets and it will improve investor confidence,” added Dames.