It’s raised concerns over the decision by some local institutional investors to stop lending to parastatals.
Asset manager Futuregrowth, which manages client assets of about R170 billion and rival Abax Investments announced this month that they have reduced or stopped lending to several state-run firms due to political uncertainty and governance issues.
In a statement, Moody’s says its put Eskom’s BA1 rating on review for downgrade on the grounds that its funding needs have been exacerbated by the rising cost of buying power from independent producers, as well as its spending to revamp and build new power stations.
Eskom is building new plants and transmission lines to augment a power grid that nearly collapsed in 2008 and forced the company to implement controlled blackouts, or load shedding, early last year that dented economic growth.
Chief Financial Officer Anoj Singh called the review “unfortunate” and said Eskom would meet Moody’s to resolve its concerns.
“The review by Moody’s is unfortunate given the progress made towards improving the company’s financial profile, successful implementation of the operations turnaround plan and Eskom’s healthy liquidity position,” Singh said in a statement.
Moody’s is also reviewing the ratings of four other state-controlled entities: the Development Bank of Southern Africa, the Industrial Development Corporation , the South African National Roads Agency (Sanral) and Land Bank.
