Fitch: Electricity shortages in South Africa

Fitch Ratings said in a special report that the risk of electricity supply shortages remains high across Southern African Development Community countries in the short- to medium-term. This is due to the age of existing power plants, grid bottlenecks, limited inter-connections, high levels of required maintenance and low reserve margins.

Fitch said it believes the long time required to build new generation capacity and those funding costs will remain key obstacles for all the Southern African Power Pool member countries over the medium-term.

The main regional generator, Eskom, will face these obstacles. The company has a long-term local- currency issuer default rating of A with a negative outlook, national long-term rating of AAA (zaf) and national short-term rating of F1+ (zaf).

Those challenges are expected to adversely affect the standalone credit profiles of regional electricity utilities in the short- to medium-term, the agency said.

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