Fitch acknowledges progress in stabilising electrical energy provide

Eskom stated that is even though Fitch has cited the constrained electrical energy provide as a restriction to financial progress in South Africa.

Fitch Scores on Wednesday affirmed South Africa’s Lengthy-Time period Overseas and Native-Foreign money Issuer Default scores at BBB- and BBB‚ respectively. The nation’s Outlook stays secure.

In its assertion Fitch stated: “Development GDP progress stays low in comparison with that of its friends‚ with 5-yr common GDP progress at simply 2.2% in comparison with a ‘BBB’ median of three.three%. GDP progress was 1.2% in 2015 and is more likely to sluggish to only zero.7% in 2016 earlier than recovering to 1.5% in 2017.

“Progress is held again by constrained electrical energy provide‚ considerations concerning the deteriorating funding local weather and fractious labour relations. The federal government has made progress in addressing energy provide issues‚ with no load shedding to date this yr‚ as upkeep administration has improved and extra renewable energy sources have been added to the grid‚ though new models from the Kusile and Medupi coal-fired energy stations will solely come on line in 2018.”

Commenting on the choice by Fitch to affirm the sovereign score‚ Eskom’s Chief Monetary Officer stated: “We recognise that a dependable electrical energy provide is a prerequisite for the nation’s financial progress and whereas we’re making certain that the availability stays unconstrained by way of our upkeep programme‚ we’re additionally aggressively executing the capital construct programme which can improve our era capability; these initiatives exhibit Eskom’s dedication to supporting authorities’s efforts of fulfilling the nation’s financial and social aims.”