Bulletin: South African Electricity Producer Eskom Faces Increased Funding Needs This Year

JOHANNESBURG (S&P Global Ratings) July 19, 2022--S&P Global Ratings said today that it expected liquidity at ESKOM Holdings SOC Ltd. (Eskom) to come under pressure in the financial year ending March 31, 2023. Not only did South African energy regulator (NERSA) award a lower-than-anticipated tariff, but also the company suffered strike action in mid-2022 that disrupted its power generation, and higher-than-forecast diesel costs. As a result, we now predict that Eskom's funding requirement for FY2023 will be about South African rand (ZAR) 45 billion, which is above our previous estimate of ZAR30 billion (see "Research Update: South Africa-Based Electricity Producer Eskom Affirmed At 'CCC+'; Outlook Still Negative," published on Nov. 26, 2021). The increased funding deficit will likely place more

...July 19, 2022 JOHANNESBURG (S&P Global Ratings) July 19, 2022--S&P Global Ratings said today that it expected liquidity at ESKOM Holdings SOC Ltd. (Eskom) to come under pressure in the financial year ending March 31, 2023. Not only did South African energy regulator (NERSA) award a lower-than-anticipated tariff, but also the company suffered strike action in mid-2022 that disrupted its power generation, and higher-than-forecast diesel costs. As a result, we now predict that Eskom's funding requirement for FY2023 will be about South African rand (ZAR) 45 billion, which is above our previous estimate of ZAR30 billion (see "Research Update: South Africa-Based Electricity Producer Eskom Affirmed At '###+'; Outlook Still Negative," published on Nov. 26, 2021). The increased funding deficit will likely place more strain on cash flows and on liquidity, but will remain broadly in line with our expectations for the rating (###+/Negative). The ZAR15 billion increase in Eskom's forecast funding requirement...

Bulletin