Eskom CEO Dan Marokane
Global ratings agency S&P recently upgraded Eskom’s long-term foreign and local currency credit ratings from B to B+, with a stable outlook.
The upgrade also applies to Eskom’s secured and unsecured debt, while government-guaranteed foreign-currency debt was raised from BB- to BB+. On the domestic front, Eskom’s national-scale rating rose from “zaBBB+/zaA-2” to “zaAV/zaA-1.”
A credit rating is a measure of how likely a company (or sovereign) is to meet its debt obligations. The recent adjustment reflects several improvements at Eskom:
- Generation performance has stabilized: Eskom reports electricity delivery 97.9 % of the time this year, up from 96 % in FY2025.
- For the first time in eight years, Eskom returned to profitability in FY2025.
- Governance, financial management, and structural reforms under the turnaround plan strengthened confidence in the utility’s ability to service debt.
Together, these factors raise investor confidence which may translate into lower borrowing costs and more stable financing for future operations or upgrades.
It’s important to understand what the B → B+ adjustment does and doesn’t imply. The rating remains in the speculative-grade bracket, below what is considered “investment grade.” According to S&P, this move signals modest improvement in credit quality, it indicates lower risk than before, but not a guarantee of safety. On the national scale, the “zaAV/zaA-1” rating among South African issuers places Eskom among the stronger domestic borrowers, a sign of relative strength within its country context.
So for stakeholders, the upgrade is positive: a vote of confidence, not yet a signal that all structural problems are solved. When S&P and others assess a utility, they look at multiple dimensions:
- Operational performance: reliability of generation, maintenance record, supply stability.
- Financial health: profitability, cash flow, debt levels, liquidity, ability to service interest and principal.
- Governance and reforms: any structural adjustments, transparency, risk & debt management.
- Support environment: state guarantees, macroeconomic conditions, regulatory context.
Eskom’s upgrade reflects progress across several of these dimensions.
For investors, lenders, and governments, in South Africa or across Africa what this upgrade shows is that reforms and operational discipline can pay off. A utility with more stable output and better governance becomes a more credible borrower.
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For other utilities in the region, Eskom’s case offers a model: measurable performance improvements and structural reform increase the chances of attracting financing on more favorable terms.
Until more regional utilities adopt similar standards and subject themselves to independent credit assessments, it remains difficult to compare risk and creditworthiness across African power providers.
