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Tuesday, 07 November 2023 20:54

Fitch rating agency affirms Rand Water at 'AA+(zaf)' with a stable outlook.

By Lehlohonolo Lehana.

Fitch Ratings Agency has affirmed the state-owned Rand Water's National Long-Term Rating at 'AA+(zaf)' with a Stable Outlook.

"The rating affirmation reflects continued strong links between Rand Water and the South African state (BB-/Stable), as per our Government-Related Entities (GRE) Rating Criteria," said Fitch in a statement.

"Fitch could change the Outlook to Negative if significant water losses (within municipalities water distribution network) contributes to lower profitability and increasing municipality arrears. In addition, further delays of infrastructure investments would constrain water supply and remain a key risk without proactive mitigating measures by management and the Department of Water and Sanitation (DWS)."

Rand Water welcomed ratings agency Fitch Ratings’ affirmation of its National Long-Term Rating at 'AA+ (zaf) 'with a Stable Outlook'.

"We appreciate Fitch Ratings' recognition of our vital role in the South African water sector and our strong financial position. This affirmation energizes us to continue our journey of excellence. We are confident in our ability to navigate the upcoming challenges and emerge even stronger," said Rand Water CEO Sipho Mosai.

Rand Water acknowledged the challenges outlined by the Fitch Ratings report, particularly increased capital expenditure rollout and municipal arrear debt that has the potential to impact our financial position negatively, noting, however, that the challenges serve as opportunities to grow, innovate and serve communities better.

Our ongoing investment in water infrastructure, including pipelines, purification plants, as well as alternative energy plants, is not just a promise but a celebration of our dedication to sustainable water supply. We understand the importance of these projects in meeting the growing demands for water in our region," Mosai added.

"As an organisation, we further reaffirm our unwavering commitment to providing high-quality water services to the communities we serve. We celebrate this achievement and will continue to work closely with our shareholder and other related stakeholders to ensure the sustainability and resilience of our water supply infrastructure."