Eskom’s downgrade places South Africa at risk

November 2016

The Democratic Alliance notes with serious concern that Eskom has received a corporate credit downgrade from BB to BB+ by ratings agency Standard and Poor.

The downgrade is a vote of no confidence in Eskom and its leadership specifically and in the relatively weak corporate governance of State-owned Entities in South Africa.

This will only serve to place further pressure on the fiscus due to the R350 billion in Government Guarantees that has been extended to Eskom.

This is sadly proof that Eskom has a severe lack of leadership both at board level and through the main Eskom stakeholder, the government, which is represented by Public Enterprises Minister Lynne Brown.

Conditions at Eskom have been going from bad to worse despite repeated claims by the current board, soon to be ex CEO Brian Molefe and Minister Brown that all was well at the entity.

This State Owned Entity is of crucial importance to the wellbeing of the South African economy. If Eskom is not run efficiently it has the power to bring the country to its knees, as happened during the load shedding period.

This downgrade was dreaded but virtually inevitable due to conditions at Eskom.  It is more obvious than ever that urgent intervention in the leadership of Eskom is required and that Eskom is in NO position to contemplate the mammoth multi trillion Rand Nuclear project

Statement issued by Natasha Mazzone MP, DA Shadow Minister of Public Enterprises, 26 November 2016