Fitch Ratings has assigned JSC ENERGO-PRO Georgia (EPG) a final Long-Term Issuer Default Rating (IDR) of ‘BB’/Stable. This follows the notes issue by EPG’s parent. A full list of rating actions is available at the end of this commentary.
The ratings are aligned with those of EPG’s sole shareholder, ENERGO-PRO a.s. (EPas), reflecting strong ties between the two, as the parent provided guarantees for most of EPG’s loans at end-2016 and will provide direct funding in future. EPG is one of the key operating subsidiaries within the group, and was responsible for about 40% of EPas’ EBITDA in 2016 (before the spin-off of generation business).
The rating also reflects EPG’s standalone profile, its natural monopoly position in electricity distribution and supply, with regulated asset-based tariffs set by the independent regulator in Georgia, the relatively short track record of regulation, EPG’s small size compared to other rated CIS utilities, volatile EBITDA and FX exposure.
