Fitch: Eskom outlook negative

Fitch Ratings said it changed the outlook on Eskom Holding Ltd.'s long-term local-currency issuer default and national long-term ratings to negative from stable.

Fitch affirmed Eskom's long-term local-currency issuer default rating at A, national long-term rating at AAA (zaf) and national short-term rating at F1+(zaf).

The change in outlook reflects challenges related to capacity and security-of-supply issues for South Africa's electricity system and a possible sharp deterioration of the financial profile to fund system enhancement and expansion in the absence of cost reflective tariff increases, Fitch said.

The ratings continue to reflect Eskom's market dominance, access to low-cost fuel supplies and competitive cost structure, the agency said.

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