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Vietnam Today

Fitch Ratings confirms EVNNPT's creditworthiness

Released at: 14:25, 12/04/2019

Fitch Ratings confirms EVNNPT's creditworthiness


National Power Transmission Corporation's ratings now align with Vietnam's sovereign rating and that of EVN.

by Doanh Doanh

Fitch Ratings released a report on April 10 regarding the creditworthiness of the National Power Transmission Corporation (EVNNPT), further demonstrating the strong credit profile of the country’s power companies.

Having attained a Long-Term Foreign-Currency Issuer Default Rating of “BB” with Stable Outlook and a Senior Unsecured Rating of “BB”, EVNNPT’s ratings align with both Vietnam’s sovereign rating and that of the national power utility, Electricity of Vietnam (EVN), issued last June. EVNNPT’s Standalone Rating is “BB+”.

EVNNPT’s rating reinforces its creditworthiness and enhances its transparency, in line with international standards. This development enables it to diversify financing sources and issue international bonds. It is now better positioned to deliver on its mission of ensuring safe, uninterrupted, and stable power transmission to serve the needs of Vietnam’s people and businesses.

“EVNNPT needs to invest around $700 - 800 million annually to meet its investment requirements under the Power Sector Development Plan 7 (PSDP7),” said Dr. Dang Phan Tuong, Chairman of the Board of Directors at EVNNPT. “The positive credit rating from Fitch Ratings confirms the strong financial standing of EVNNPT and will facilitate its penetration into international capital markets to raise capital.”

The World Bank’s Energy and Extractives Global Practice supported the credit rating exercise in collaboration with the Singapore-based Global Infrastructure Facility (GIF) team, which managed technical support, with financing from the Public-Private Infrastructure Advisory Facility (PPIAF). World Bank support included appointing Mizuho Bank to prepare for the credit rating readiness and the rating exercise.

“The electricity transmission network is the backbone of a power system and of critical importance to providing reliable and sustainable power for Vietnam’s socioeconomic development,” said Mr. Ousmane Dione, Country Director for the World Bank in Vietnam. “Following EVN, the positive credit rating will enable EVNNPT to access new sources of commercial financing without sovereign guarantees that can complement traditional sources of financing, such as government budget or ODA, in further investments, to address transmission network bottlenecks to integrate and scale up solar and wind energy.”

EVNNPT’s credit profile is supported by its dominant market position as a monopoly player in Vietnam’s electricity transmission sector, limited price and volume risk under the regulatory framework, which enhances its revenue and profit visibility, pooled counterparty risk, and strong receivables.

Vietnam’s development record over the past three decades has been significant. Economic and political reforms under “doi moi”, launched in 1986, have spurred rapid growth and development and transformed Vietnam from one of the world’s lowest income nations to a lower middle-income country today, with 2018 GDP per capita above $2,500. The sustained global recovery has helped consolidate these gains. The electricity sector has been critical in supporting economic development by achieving almost universal electricity access and reducing technical and commercial losses.

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