Eskom, which produces 95% of South Africa's electricity, will look to sell more debt as its projects to build more capacity remain on schedule.
“We’re very pleased with some of the noises we’ve been getting from some of the ratings agencies recently and we have no doubt that we would be able to feature well in the international bond market,” Steve Lennon, the utility’s sustainability executive, said in a Bloomberg TV Africa interview with Eleni Giokos in Davos on Wednesday. “We’ll continue to tap the local and international bond market.”
After delays including labour strikes and contractors missing deadlines, the company estimates it will complete the first unit of the planned 4 764 megawatt Medupi power plant in the second half of this year. Fitch Ratings upgraded the utility’s national long term rating one step to AAA, the highest assessment, last week.
The yield on Eskom’s $1-billion of debt due in August 2023 fell eight basis points, or 0.08 percentage point, this year to 6.38% on January 17, the lowest since November 1.
“I don’t anticipate further delays” on construction of the Medupi plant, Lennon said. “That’s the programme that we’re still working towards, we’re optimistic that we will be there," he said. The 4 800 MW Kusile plant, set to be the third largest coal-fired power plant, ‘‘is also on track,” Lennon said.
South Africa won’t see a repeat of the rolling blackouts that cut power to industrial users in 2008, shutting mines and factories for five days.
“There’s a lot more maturity amongst the business community and amongst the South African consumers when it comes to electricity and we made great strides in the more efficient use of electricity in South Africa.” – Bloomberg