Ratings agency Fitch has downgraded Eskom but given a stable outlook.

The power utility announced that Fitch has downgraded Eskom’s Long-term local currency Issuer Default Rating (IDR) to ‘BBB-’ from ‘BBB’. Fitch Ratings has also affirmed Eskom’s National long-term and short-term ratings at ‘AAA’ and ‘F1+’, respectively. The outlook is stable.

Eskom reports that the rating revision is primarily driven by Fitch’s downgrade of South Africa’s Long-term local currency IDR to ‘BBB-’ from ‘BBB’. This decision was as a result of Fitch’s recalibration of the sovereign rating criteria; it is important to note that the revision of the rating was not because of any fundamental changes on the sovereign credit.

“Given Eskom’s strong link and support from the South African government and its high sensitivity to changes in the sovereign credit profile, Eskom’s downgrade reflects the downgrading of South Africa’s rating,” the power utility said in a statement.

Eskom’s national long-term and short-term ratings remain unchanged.

“We note the decision by Fitch to downgrade Eskom on the back of the Sovereign downgrade; in the interests of the economy we will continue to focus on stabilising the security of supply without compromising Eskom’s financial sustainability,” said Eskom Chief Financial Officer Anoj Singh.