Illustrative photo (Source: VNA)Hanoi (VNA) – Fitch Ratings (Fitch) gave the Electricity of Vietnam (EVN) aLong-Term Foreign-Currency Issuer Default Rating (IDR) of “BB” with a stableoutlook.
EVN is the first government-linkednon-financial corporate rated by Fitch in Vietnam.
The rating aligns with Vietnam’s sovereignrating.
The Group is now one step closer to issuing bonds and strengthening itsfinancing capacity, following the Fitch’s rating.
According to EVN Vice President Dinh Quang Tri, the positive rating enables EVNto issue international bonds, diversify financing sources and reassure domesticand foreign institutional investors.
“This positive rating enables EVN to issueinternational bonds, diversify our financing sources, and reassure domestic andforeign institutional investors. We are now on a stronger footing to delivermore reliable electricity to Vietnam,” said Dinh Quang Tri, Vice President ofEVN.
He noted that to maintain and improve the positive rating, theGroup will work to ensure stable financial norms and renew financialmanagement.
“This positive credit rating will give assuranceto the private sector and commercial lenders about the financial and technicalcapacity of EVN and will alter their risk perception in signing long-term powerpurchase agreements (PPAs) and extending credit. The credit rating will alsoprovide comfort to institutional investors, both domestic and foreign, for anyplanned bond issuance by EVN,” said Ousmane Dione, World Bank Country Directorfor Vietnam.
Fitch’s ratings assignment is premised on EVN’s strong linkages to the State,its market position, and robust demand for electricity, in companion with solidcollection rates.
Meanwhile, Jordan Schwartz, Co-chair of the Global Infrastructure Facility(GIF) Governing Council and Director of the Infrastructure, PPPs &Guarantees Group, World Bank, said that creating a favourable environment formore private sector investment and helping EVN better access to capital marketare what take place in Vietnam.
He expressed his hope that the process will improve financial health ofVietnam’s power sector in particular and the country in general as itdiversifies sources of financing to the benefit of consumers and taxpayers inthe long-run.
EVN ownsand operates 61 percent of Vietnam’s total installed generation capacity,including large strategic hydropower assets, which the Government uses togenerate electricity, control floods and for irrigation.
The State-run Group produced 74.42 billion kWh of electricity in the first fivemonths of 2018, an increase of 10.5 percent from a year earlier.
Electricity losses in the January-May period were estimated at 6.2 percent, onepercent lower than the target of 7.2 percent.
In May alone, the group generated 16.02 billion kWh of electricity, up 10.06percent year on year, and ensured a stable supply of power as the summer came.The group’s electricity output from domestic production and import reached19.59 billion kWh of electricity in the month.-VNA
VNA
