New Delhi, Dec 18: Moody's Investors Service and its Indian affiliate, ICRA Limited, has predicted
stable outlook for the power sector in India over the next 12-18 months which
reflects their expectation of generally stable industry conditions and
government policy initiatives.
It will likely lead to improvements in the financial position
of state-owned electricity distribution companies.
In a press release, Moody's said that that India (rated Baa2 stable by Moody's) will see a change in its energy mix towards renewables, as the country adds more capacity and moves towards its commitments under the Paris Agreement on climate change.
However, the growth in renewable generation capacity will put pressure on conventional power generation, although most Moody's-rated power producers are protected by availability based power purchase agreements.
Moody's also said that the Indian government's debt restructuring of the financially weak distribution utilities, under the Ujwal Discom Assurance Yojana (UDAY), will gradually improve the financial conditions of state owned distribution companies, thereby alleviating off-taker risk, which is a key negative factor for the credit quality of power generators.
"India's state-owned power distribution companies will demonstrate weak to moderate financial profiles," said Abhishek Tyagi, a Moody's Vice President and Senior Analyst. "Nevertheless, we do not expect the emergence of material off-taker risk over the next 12-18 months. Consequently, India's independent power producers should maintain credit metrics consistent with their current credit quality." UNI
In a press release, Moody's said that that India (rated Baa2 stable by Moody's) will see a change in its energy mix towards renewables, as the country adds more capacity and moves towards its commitments under the Paris Agreement on climate change.
However, the growth in renewable generation capacity will put pressure on conventional power generation, although most Moody's-rated power producers are protected by availability based power purchase agreements.
Moody's also said that the Indian government's debt restructuring of the financially weak distribution utilities, under the Ujwal Discom Assurance Yojana (UDAY), will gradually improve the financial conditions of state owned distribution companies, thereby alleviating off-taker risk, which is a key negative factor for the credit quality of power generators.
"India's state-owned power distribution companies will demonstrate weak to moderate financial profiles," said Abhishek Tyagi, a Moody's Vice President and Senior Analyst. "Nevertheless, we do not expect the emergence of material off-taker risk over the next 12-18 months. Consequently, India's independent power producers should maintain credit metrics consistent with their current credit quality." UNI
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