The South African government extended ESKOM's South Africa rand (ZAR) 350 billion government guarantee framework to 2023 from 2017. While the extension strengthens ESKOM's access to funds, the electricity regulator decided on a lower-than-anticipated tariff increase for fiscal 2018 (ending March 31, 2018), that we consider will squeeze ESKOM's liquidity and ability to service debt (excluding government support). At the same time, we continue to assess the likelihood of ESKOM receiving government support as extremely high. We are therefore affirming our 'BB-' global scale and 'zaBB+/ZaB' national scale ratings on ESKOM. The negative outlook reflects that on the sovereign as well as uncertainty regarding the government's commitment and ability to provide timely support to ESKOM for any funding shortfalls in
