TASHKENT, Uzbekistan, July 29. Fitch Ratings has maintained the Long-Term Issuer Default Rating (IDR) of Uzbekhydroenergo (UGE, Uzbekistan's energy company) at 'BB-' with a Stable Outlook, Trend reports.
This affirmation is based on the state's ongoing guarantee for all of UGE's debt and Fitch's anticipation that the proportion of debt with state backing will remain above 75 percent for 2024–2027. This alignment in UGE's rating with that of the sovereign is in accordance with Fitch's Government-Related Entities Rating Criteria (GRE).
"UGE's 'b+' Standalone Credit Profile (SCP) reflects its gradual increase in scale, monopoly position in hydroelectric generation in Uzbekistan, and high operating profitability. Low tariff visibility, mounting trade receivables stock, limitations in the operating environment, and our expectation of capex-driven re-leveraging up to its negative sensitivity of 4.0x remain key constraints. We expect UGE to maintain some financial headroom in 2024 on the back of strong operating performance before it is exhausted towards the end of 2027 by the acceleration of its investment plan," the agency said.
As Fitch noted, all of UGE's debt is backed by the government's guarantee. UGE intends to continue financing its intensive capex for new construction and modernization with a mix of state-guaranteed loans from development banks and international financial institutions, as well as with its own funds. UGE may start attracting non-guaranteed loans once the regulatory environment matures and allows the company to rely less on state support.
Meanwhile, Fitch Ratings maintained Uzbekhydroenergo’s (IDR) at 'BB-' with a Stable Outlook in July last year.
The affirmation was based on the state's ongoing guarantee for all of UGE's debt and Fitch's anticipation that the proportion of debt with state backing will exceed 75 percent in the next four years. This alignment in UGE's rating with that of the sovereign is in accordance with Fitch's Government-Related Entities Rating Criteria (GRE).