Moody's supports Eskom's proposed electricity price hike

JOHANNESBURG - Moody's believes Eskom will become credit-positive if energy regulator, National Energy Regulator of South Africa (Nersa) approves its proposed electricity price hike.

The ratings agency says a 15 percent tariff increase for the next three years would allow Eskom to address rising operating costs and its sizeable capital expenditure programme.

It would also be able to meet its debt-servicing costs more easily but the agency cautions that recent regulatory decisions suggest that such large tariff increases might be unachievable.

READ: Eskom plans lengthy power cuts

Moody's has already rated Eskom at junk status.

Moody’s is the only agency to rate South Africa above investment grade.

Nersa's decision on the tariff hike is expected by the first of March.