Fitch Ratings has upgraded Public Power Corporation S.A.’s (PPC) Long-Term Issuer Default Rating (IDR) to ‘BB’ from ‘BB-’ and has revised its Standalone Credit Profile (SCP) to ‘bb’ from ‘bb-’. The Outlook on the IDR is Stable.
The upgrade reflects Fitch’s expectation that PPC’s accelerated renewables expansion through 2030 will strengthen its business profile by enhancing geographic diversification, improving integration with supply and reducing exposure to legacy thermal generation. The growth strategy will modestly dilute the contribution of regulated earnings, but Fitch expects the overall credit impact to be positive.
The strategy entails significant execution risk and will result in persistently negative free cash flow (FCF) and temporary releveraging. Nevertheless, Fitch expects PPC’s leverage metrics to be consistent with the ‘BB, especially given the revised debt capacity. The upgrade is also supported by the public financial policy aimed at keeping reported net debt / EBITDA below 3.5x by 2028.
Key rating drivers:
Improved Scale, Diversification and Integration: The 2030 strategy accelerates PPC’s transformation into a larger, more diversified integrated utility, increasingly focused on clean generation and supply activities. By 2030, the group’s generation asset base is expected to double from 2025. Geographic diversification will also improve by 2030 throughout expansion across Central and Southeastern Europe (CSEE) markets,…
