Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom

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