Fitch Ratings has affirmed Sri Lanka-based Ceylon Electricity Board’s (CEB) National Long-Term Rating at ‘AA+(lka)’ with a Stable Outlook.
The rating on CEB, which is 100% state-owned, is equalised with that of the Sri Lankan sovereign (B/Stable), reflecting strong linkages with the parent, in line with Fitch’s Parent and Subsidiary Rating Linkage criteria. The equalisation takes into consideration CEB’s strategic importance to Sri Lanka in ensuring power security and supply of affordable electricity to the public.
Strong Linkages with State: Fitch assesses the linkages between CEB and the state to be strong, reflecting explicit guarantees and financial support through equity infusions and debt funding.
The government also implicitly guarantees CEB’s project loans, which account for around 80% of its outstanding debt. These loans are extended by bilateral and multilateral agencies and routed through the government for development of power infrastructure. CEB’s strategic importance to the state stems from its position as the country’s sole grid operator and distributor and the generator of 80% of electricity in Sri Lanka.
Fitch believes the Sri Lankan government uses CEB as a vehicle to provide an essential public service.
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