Fitch Ratings assigns EVN transmission unit 'positive outlook'

Fitch Ratings has assigned EVNNPT, the national power transmission corporation under state utility Vietnam Electricity (EVN), a long-term foreign-currency issuer default rating (IDR) of 'BB' with “positive outlook.”

In an announcement last Friday, Fitch Ratings added that EVNNPT’s unsecured rating was ‘BB.’

The corporation's ratings are based on the consolidated profile of its parent firm EVN with a ‘BB’ rating and positive outlook, under Fitch's parent and subsidiary linkage rating criteria.

Fitch assesses EVNNPT's standalone credit profile at 'bb+' as the rating is supported by its monopoly in Vietnam's electricity transmission sector and pooled counterparty risk and low receivables.

Fitch expects the transmission tariff in Vietnam to increase 17% in 2023 from VND79.08 (0.33 U.S cents) per kWh in 2022, which would support EVNNPT’s profitability amid rising costs.

Fitch also expects EVNNPT’s transmission volume to go up 3% to 218 billion units this year, lower than the estimated growth of 5.3% in 2022.

EVNNPT eyes to easier access international capital without government guarantee in line with Fitch’s latest ratings, in order to serve its capital need of $700-800 million per year amid lowering allocation of the government's official development assistance (ODA), EVNNPT told a meeting with Fitch Ratings on March 3.

EVNNPT transmitted 15.93 billion kWh in February, totaling 30.36 billion kWh in the first two months of this year, according to the firm’s monthly report. The two-month figure went down 0.4% year-on-year and equaled to 13.7% of the whole-year target.

The power loss rate reached 2.32% in January-February, or 0.17 percentage points above the full-year goal of 2.15%.