Fitch raises rating of Vietnam's northern power corporation
Fitch Ratings has upgraded the Vietnam Electricity Northern Power Corporation's (EVNNPC) long-term foreign-currency issuer default rating to 'BB+' with a stable outlook.
The rating for EVNNPC is at the same level with that of the parent, Vietnam Electricity (EVN) which wholly owns EVNNPC, and that of Vietnam's sovereign rating.
The "BB " rating shows EVNNPC's great efforts in improving the efficiency of production and business activities, especially when the corporation in particular and EVN, in general, faced many difficulties and challenges in financial balance in 2023.
Fitch also affirmed that EVNNPC's independent financial profile is better than the credit rating and has low risk with a debt recovery rate reaching 100% and advantages due to diverse and stable customers.
Vietnam's strong development outlook with GDP growth being projected at 6.3 - 6.5% in the 2025-2026 period will boost electricity demand and increase revenue for EVNNPC.
EVNNPC is one of the five electricity distribution corporations under the EVN, responsible for managing, operating, and selling electricity in 27 northern provinces and cities. It has been the unit with the highest commercial electricity growth rate in the EVN for many consecutive years. Therefore, it has a high need to invest in power projects to promptly meet the growth of load.
Fitch Rating's credit assessment and rating at BB with a stable outlook will help EVNNPC arrange foreign investment capital towards full autonomy in mobilising capital to implement future power projects.
Previously, in 2020, EVNNPC was for the first time assigned a credit rating of BB/stable by Fitch. In the next two years - 2021 and 2022, it was assessed at "BB" with a positive outlook. Its credit rating was upgraded to BB with a stable outlook by Fitch Rating for the first time in 2023.
