City’s unique wins to fight national electricity shortages; well-run city drives Moody’s positive rating upgrade
The City of Cape Town welcomes Moody’s Ratings’ decision to upgrade its outlook from stable to positive, affirming Cape Town’s position as South Africa’s best-run metro and a leader in good governance, financial management and service delivery. Read more below:
The ratings agency Moody’s has recognised Cape Town’s proactive efforts to reduce the impact of national electricity challenges through municipal power procurement, energy diversification and local generation initiatives. According to the report, these measures have reduced Cape Town’s exposure to national electricity shortages “relative to the sovereign and most peer metropolitan municipalities”.
Moody’s has affirmed Cape Town’s Ba2 long-term issuer rating and highlighted the City’s “strong and resilient standalone credit profile”, together with “sound financial governance” and “prudent financial planning”.
‘Positive ratings are good for the City as it means it can access loan funding at favourable rates. This is especially important as the City continues to roll out its record R40 bn infrastructure plan,’ said the City’s Mayoral Committee Member for Finance, Councillor Siseko Mbandezi.
The ratings agency noted that Cape Town continues to demonstrate “consistently robust operating performance”, supported by exceptionally high revenue collection rates of around 98%, strong cash reserves, low debt levels, and a diversified local economy driven by sectors such as tourism, logistics and services. The agency also highlighted the City’s strong liquidity position, prudent debt management and transparent financial reporting as key strengths that continue to distinguish Cape Town from other metros in South Africa.
‘This positive outlook from Moody’s is a strong vote of confidence in Cape Town’s governance and resilience. While many metros are under severe financial and service delivery pressure, this City of Hope continues to manage public finances responsibly, invest in critical infrastructure, and work proactively to protect residents and the local economy from national risks,’ said Councillor Mbandezi.
