Statement by the Minister of Public Enterprises on Eskom's bond issue

20 Jan 2011

The Minister of Public Enterprises, Mr Malusi Gigaba welcomes the successful outcome of Eskom’s international bond roadshow. The oversubscription on the bond issuance demonstrates international investors’ confidence in Eskom and the South African Government. This has also been demonstrated by rating agency Fitch’s recent revision of its ratings for the utility, and the change in the outlook on the sovereign rating from negative to stable.

The support that government has provided to Eskom, in the form of the R60 billion subordinated loan that has been drawn down over the last three years and the increase in the guarantee facility to R350 billion, has lowered Eskom’s risk profile and provided the necessary foundation for a return to Eskom being able to raise funding off its own balance sheet.

We hope that this trend will persist as other State-Owned Enterprises approach the market to raise funds for their capital expansion programmes, as this will serve to reduce pressure on the fiscus. The completion of Eskom’s Build Programme is critical for ensuring security of electricity supply for the country, and for supporting government’s economic growth and development objectives.

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Issued by: Department of Public Enterprises
20 Jan 2011