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, the government's intention to remain supportive of the company's credit quality, strong electricity demand growth, a more supportive regulatory regime following the introduction of multiyear price reviews, and significant financial assets. These strengths are offset by a substantial capital expenditure program to increase generation capacity, which will be largely debt financed; an already moderately leveraged balance sheet on a gross debt basis; and the potential for a restructuring of the power industry in the longer term. Standard&Poor's Ratings Services analyzes ESKOM using its criteria for government-related entities and views the company
