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Moody’s: Change is urgently needed at Eskom

The agency has given its view on the country’s power producer and the role it plays in economic growth.

Picture: EWN

JOHANNESBURG - Ratings agency Moody’s says Eskom’s results highlight an unsustainable capital structure and an urgent turnaround plan is needed.

The agency has given its view on the country’s power producer and the role it plays in economic growth.

Moody's says government’s planned capital transfers of R105 billion over 2020 and 2021 will only stabilise Eskom’s debt burden.

Eskom recorded a loss of R20,7 billion for the 2018/2019 financial year despite efforts to stabilise the utility.

Moody’s says it notes that increased support has become necessary for Eskom. It says that in the next financial year, it expects financing costs to exceed Eskom’s operating cash flows.

The agency says Eskom’s current capital structure is not sustainable, indicating a strong and urgent need for a longer-term turnaround plan

Moody's says it recognises Eskom’s continued strategic importance to country's economy and that change is urgently needed.