PV Power receives 'BB' rating for third consecutive year

29 May 2023 (Vietnam News Agency) Fitch Ratings has affirmed PetroVietnam Power Corporation (PV Power)'s long-term foreign-currency issuer default rating (IDR) at 'BB' with a positive outlook.

This is the third consecutive year that PV Power has received 'BB' rating with a positive outlook, the highest rating that a Vietnamese company can reach.

The rating, which is based on PV Power's Standalone Credit Profile (SCP) assessment of 'BB', is on a par with the IDR of its 80% parent, Vietnam Oil and Gas Group (PVN, BB/Positive).

PV Power's SCP is driven by its strong market position as Vietnam's second-largest electricity producer, accounting for around 5% of the country's total electricity output and 5% of installed capacity in 2022. It also benefits from diversified fuel sources, long-term power-purchase agreements (PPAs) with Vietnam Electricity (EVN, BB/Positive) for more than 80% of its electricity output and a strong financial profile.

However, EVN's IDR constrains PV Power's SCP, even though PV Power's financial profile is stronger than its SCP assessment indicates. The positive outlook is driven by the positive outlook on EVN's IDR.

The rating is expected to help the firm attract more attention from international credit institutions. Currently, PV Power is investing in many projects with large capital needs such as Nhon Trach 3 and 4 Power Plants and a power project using imported liquefied natural gas (LNG) in Quang Ninh.

As of the end of the first quarter this year, PV Power's total electricity production had surpassed 4 billion kWh, exceeding its plan by 16%, with a revenue of 7.91 trillion VND (337.04 million USD), 20% higher that its quarterly plan, up 10% year on year.