S&P does not expect electricity tariffs to increase in Azerbaijan
Baku, Azerbaijan, April 29
By Azad Hasanli - Trend:
Standard & Poor's Ratings Services does not expect electricity tariffs to increase in Azerbaijan, Azerbaijan-based electricity utility Azerenerji's ratings published on S&P website said.
S&P said that Azerenerji's critical role for and integral link with the Azerbaijani government has remained unchanged.
"We assume that, without extraordinary state support, Azerenerji might face difficulties in servicing its debts because of unsustainable capital structure," the agency said.
"We do not expect the government to increase Azerenerji's tariffs, given its previous reluctance to do so due to social concerns, but we do assume the state might provide support by other means, such as paying Azerenerji's debt (all of which is guaranteed by the state as we understand), equity injections, tax write-offs," the agency said.
"Furthermore, the state's economic development and social mandates ensure reliable and affordable electricity provision," S&P said.
S&P lowered its long-term corporate credit rating on Azerbaijan-based electricity utility Azerenerji to 'BB' from 'BB+'. The outlook is stable. S&P affirmed the 'B' short-term corporate credit rating.
S&P also removed the ratings from CreditWatch, where we had placed them with negative implications on Jan. 11, 2016.