TASHKENT, Uzbekistan, January 22. Fitch Ratings (a global credit rating agency) has affirmed the long-term issuer default rating (IDR) of Thermal Power Plants (Uzbekistan’s electricity generation company, TPP) at 'BB-' with a stable outlook, the agency told Trend.
The rating is in sync with Uzbekistan’s sovereign rating because TPP has solid connections to the government, which backs almost all of the company’s debt or offers funding through state channels.
The affirmation reflects TPP’s strategic importance as a government-related entity, with the state owning 100 percent of its shares and playing a direct role in its operations, including tariff approvals and capital investments. TPP is recognized as vital to Uzbekistan’s energy sector, ensuring electricity and heat supply while maintaining a significant market share of 20-25 percent.
However, TPP’s standalone credit profile remains constrained at 'ccc,' reflecting operational challenges following the government-mandated disposal of several large power plants, which reduced its installed capacity to 4.5GW. Despite these challenges, tariff adjustments in 2024 and government-backed financial support have contributed to improved earnings. Future reforms, including plans to liberalize the electricity market by 2026, could enhance TPP’s cash flow and competitive position.
Fitch highlighted the ongoing importance of regulatory decisions in shaping TPP’s financial performance, as nearly all revenue and key costs, such as fuel purchases, are regulated. The company is walking a tightrope with risks linked to high leverage, foreign exchange exposure, and dependence on state funding. However, the anticipated efficiency improvements and market reforms are likely to pave the way for long-term stability.
Fitch Ratings is a global credit rating agency that assesses the creditworthiness and financial stability of a wide range of organizations, including corporations, banks, governments, and other financial institutions.
