Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
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Overview of <strong>Multi</strong>-<strong>Year</strong> <strong>Price</strong> <strong>Determination</strong><br />
2013/14–2017/18 (MYPD 3)<br />
Page 78 of 144<br />
The R350 billion in guarantees from the government is linked only to debt issued up to the<br />
end of the current build programme, which ends with the substantial commissioning of Kusile<br />
power plant in 2018/19.<br />
Figure 6 shows the projected net use of these guarantees, which will peak at about<br />
R150 billion in 2018/19. However, the total R350 billion guarantees remain critical to support<br />
<strong>Eskom</strong>‟s investment-grade rating.<br />
Figure 6: <strong>Eskom</strong> Holdings projected guaranteed debt profile<br />
3.6.3 Funding<br />
The willingness of investors to lend is positively related to an issuer‟s credit rating. Better<br />
credit ratings often result in access to a larger pool of funding, coupled with a reduction in<br />
the cost of borrowing due to a lower perceived default risk. The financial markets crisis has<br />
changed the financial landscape for all participants, resulting in a stricter regulatory