S&P upgrades PPC rating on strength of favorable prospects

Credit rating agency Standard & Poor’s has upgraded power utility PPC’s financial status, driven by the utility’s plan to decarbonize sooner than planned, as well as, by 2022, a projected EBITDA figure of between 900 million and one billion euros and an investment plan to reach a total of two billion euros.

S&P projects PPC’s swifter withdrawal of high-cost lignite facilities will result in a lignite-fired power station portfolio with a total capacity of just 700 MW in 2023, down from 3.7 GW in December, 2019. This development will decrease PPC’s electricity generation costs as a result of the utility’s greater emphasis on renewable energy sources and natural gas for production, the credit agency noted.

PPC, according to S&P, will invest two billion euros to increase its RES portfolio from 154 MW to 1.5 GW.

PPC’s retail electricity market share contraction, which reduced its customer base from 6.9 million in 2019 to 6.6 million in 2019, will be offset by bigger profit margins to be achieved through reduced discount rates for tariffs, S&P noted.

The credit agency projects PPC’s market share will drop sharply in 2022 to 60 percent, from 75.8 percent at present.

S&P has also taken into account the utility’s two securitization package collections for unpaid receivables, expect to bring in 500 million euros.