The ratings on South Africa-based electricity utility ESKOM Holdings Ltd. reflect the company's critical role in the development of South Africa's economy through its successful electrification program. They also reflect the government's intention to remain supportive of the company's credit quality, strong electricity demand growth, a more supportive regulatory regime, and significant financial assets. Government support moderately enhances the company's stand-alone credit quality. These strengths are offset by ESKOM's relatively weak financial structure based on gross debt, the requirement to maintain a supply-and-demand balance at a time of rapidly increasing demand, exposure to cyclical commodity-based industries, and longer term exposure to the restructuring of the electricity supply industry. Standard&Poor's Ratings Services analyzes ESKOM using its criteria for government-related
