ASTANA, Kazakhstan, March 19. S&P Global Ratings has affirmed the rating of Kazakhstan Electricity Grid Operating Company's (KEGOC) at 'BB+', accounting for extraordinary government support with a stable outlook, Trend reports.
S&P expects tariff increases and favorable regulatory changes to result in improved EBITDA generation of Kazakhstani tenge 100 billion (about $221 million) in 2023 and 120 billion–130 billion tenge (about $265–287 million) in 2024–2025.
The rating agency further expects funds from operations (FFO) to debt to peak above 45 percent before stabilizing at around 30 percent by 2026, as the company will need to accumulate debt to finance heavy capital spending (capex).
Standard & Poor's further notes scope for additional tariff revision by 2025, which could compensate for the sizable investment program, offsetting expected debt accumulation and supporting metrics.
As a result, S&P revised its assessment of Kazakhstan Electricity Grid Operating Co.'s (KEGOC's) stand-alone credit profile (SACP) to 'bb' from 'bb-'.
Furthermore, the stable outlook underscores S&P's belief that KEGOC will maintain FFO to debt ratios well above 30 percent, even at the top of the investment cycle, thanks to higher EBITDA generation as a result of regulatory improvements.
If S&P were to upgrade Kazakhstan, although it does not expect this in its base case, it could lead to an upgrade of KEGOC, if coupled with KEGOC's sustained creditworthiness.
