Moody’s Investors Service (Moody’s) has assigned for the first time a A1 long-term issuer rating and a BAA1 Baseline Credit Assessment to Qatar General Electricity & Water Corporation (Kahramaa). The outlook is stable.
The agency revealed in its assessment that the long-term rating of Kahramaa supports the low risks of electricity and water distribution activities, as a government corporation is the owner and the sole operator of the system of transmission and distribution of electricity and water in Qatar, in addition to the strong financial performance of the corporation, Kahramaa said in a statement.
Moody’s expected that the demand for electricity will increase by about 5 percent and water by about 4 percent annually during the next five years, in light of the overall development taking place in the country, with Kahramaa’s ability to fulfill its obligations towards meeting the growing growth in the demand for electricity and water in light of what it implemented electricity network expansion projects in Qatar and the major strategic Water Security Mega Reservoirs Project.
President of the Qatar General Electricity and Water Corporation (Kahramaa) Eng. Essa bin Hilal Al Kuwari said: “This high evaluation reflects the success of Kahramaa’s plans based on financial sustainability. It also confirms the strong financial performance achieved by the Kahramaa, in light of the high rating of the Qatari economy and the support and direction of our wise government, which Moody’s relied upon when Kahramaa was rated.”
He added that Moody’s high rating for the first time for Kahramaa puts us in front of a new commitment, which is to continue to work to enhance financial sustainability and continue to improve operating efficiency and rationalise costs across the organization’s operations by adopting a number of initiatives.
Al Kuwari noted that Kahramaa’s distinguished performance in the financial aspect with the success of the corporation in fulfilling its obligations in providing sustainable and high-quality electricity and water and its role as a key partner in the development projects witnessed by Qatar
Moody’s has also awarded Kahramaa a basic credit rating of ‘baa1’.
The agency also suggested that the internal financial flows of the corporation be sufficient to cover the expected investments during the coming period, which the agency estimated during the next five years to be about QR30bn, noting that Kahrama’s liquidity is sufficient with expected cash.