EVN is the first government-linked non-financial corporate in Vietnam rated by Fitch.
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EVN's sustainable financing strategy is supported by technical assistance from the World Bank.
"This positive credit rating will give assurance to the private sector and commercial lenders about the financial and technical capacity of EVN and will alter their risk perception in signing long-term power purchase agreements (PPAs) and extending credit.
The credit rating will also provide comfort to institutional investors, both domestic and foreign, for any planned bond issuance by EVN," said Ousmane Dione, World Bank Country Director for Vietnam.
Fitch's ratings assignment is premised on EVN's strong linkages to the state, its market position, and robust demand for electricity, coupled with solid collection rates.
"Creating an enabling environment for more private sector investment and helping EVN benefit from the discipline that comes with access to capital markets, is what took place in Vietnam. We expect this process to help the financial health of Vietnam's power sector in particular, and the country in general as it diversifies its sources of financing to the benefit of consumers and taxpayers in the long-run,' said Jordan Schwartz, Co-chair of the GIF Governing Council and Director of the Infrastructure, PPPs & Guarantees Group, World Bank.
The Global Infrastructure Facility (GIF) is housed within the World Bank as a partnership among governments, multilateral development banks, private sector investors, and financiers provides support for project preparation, structuring and advisory to clients in emerging markets.
EVN operates about 61% of the country's total installed generation capacity, including large strategic hydro-power assets, which the government uses to generate electricity, control floods and for irrigation. EVN also operates the national power-dispatch system, selling electricity to more than 25 million customers across the country. The group has steadily augmented its generation capacity and cut transmission and distribution losses over the previous few years.
Electricity demand in Vietnam is forecast to continue increasing at an average rate of 9% per annum, driven by rising industrialization, urbanization and affluence.
Vietnam has a solid national electrification ratio of 99.2%, with the ratio reaching almost 100% in urban areas. According to management, all electricity consumers are billed regularly and collection rates are between 99% and 100% across EVN's five power distribution companies, according to Fitch.
