EVN gains Fitch’s positive credit rating for first time hinh anh 1Illustrative photo (Source: VNA)

Hanoi (VNA) – Fitch Ratings (Fitch) gave the Electricity of Vietnam (EVN) a Long-Term Foreign-Currency Issuer Default Rating (IDR) of “BB” with a stable outlook.

EVN is the first government-linked non-financial corporate rated by Fitch in Vietnam.

The rating aligns with Vietnam’s sovereign rating.

The Group is now one step closer to issuing bonds and strengthening its financing capacity, following the Fitch’s rating.

According to EVN Vice President Dinh Quang Tri, the positive rating enables EVN to issue international bonds, diversify financing sources and reassure domestic and foreign institutional investors.

“This positive rating enables EVN to issue international bonds, diversify our financing sources, and reassure domestic and foreign institutional investors. We are now on a stronger footing to deliver more reliable electricity to Vietnam,” said Dinh Quang Tri, Vice President of EVN. 

He noted that to maintain and improve the positive rating, the Group will work to ensure stable financial norms and renew financial management.

“This positive credit rating will give assurance to the private sector and commercial lenders about the financial and technical capacity of EVN and will alter their risk perception in signing long-term power purchase agreements (PPAs) and extending credit. The credit rating will also provide comfort to institutional investors, both domestic and foreign, for any planned bond issuance by EVN,” said Ousmane Dione, World Bank Country Director for 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 solid collection 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 for more private sector investment and helping EVN better access to capital market are what take place in Vietnam.

He expressed his hope that the process will improve financial health of Vietnam’s power sector in particular and the country in general as it diversifies sources of financing to the benefit of consumers and taxpayers in the long-run.

EVN owns and operates 61 percent of Vietnam’s total installed generation capacity, including large strategic hydropower assets, which the Government uses to generate electricity, control floods and for irrigation.

The State-run Group produced 74.42 billion kWh of electricity in the first five months 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, one percent lower than the target of 7.2 percent.

In May alone, the group generated 16.02 billion kWh of electricity, up 10.06 percent year on year, and ensured a stable supply of power as the summer came. The group’s electricity output from domestic production and import reached 19.59 billion kWh of electricity in the month.-VNA