Central role in development of the South African economy. An increasingly transparent regulatory regime. Strong electricity demand growth. Dominant position in the South African electricity market. Weak financial structure. Likelihood that operations will be substantially restructured. Narrowing generating capacity margin. Continued development of foreign and unregulated activities. The ratings on ESKOM Holdings Ltd., the South African electricity utility, reflect its critical role in the development of the Republic of South Africa's (foreign currency BBB/Stable/A-3; local currency A/Stable/A-1) economy through its successful electrification program. They also factor in the government's intention to remain supportive of ESKOM's credit quality, strong electricity demand growth, and a supportive regulatory regime. These strengths are offset by a relatively weak financial structure, an annual tariff-setting cycle,
