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PRESS RELEASE July 30, 2020

Hanoi Power Corporation Receives BB Credit Rating from Fitch with support from the World Bank

HANOI, July 31, 2020—Hanoi Power Corporation (EVNHANOI), a subsidiary of the state-owned utility Vietnam Electricity (EVN), has received a credit rating of BB with stable outlook from the global credit rating agency Fitch.  

Fitch’s rating of EVNHANOI, announced on July 29, is on par with both Vietnam’s sovereign rating and that of EVN, making it the first such utility in Vietnam and one of a select few in the region to achieve this landmark. This puts EVNHANOI on a stronger footing to scale up financing through more diversified sources including international capital markets, for instance by issuing long-term bonds.

Nguyen Anh Tuan, Chairman of Hanoi Power Corporation said: “This marks a significant turn for EVNHANOI. Fitch’s positive rating is an important building block toward becoming fully self-sufficient in project financing by enabling us to optimize the capital structure and diversify our source of financing”.

The World Bank’s Energy and Extractives Global Practice supported the credit rating exercise through a combination of financing and advisory support, including by appointing Mizuho Bank to prepare for credit rating readiness and the subsequent rating exercise. This engagement was supported by the Public Private Infrastructure Advisory Facility (PPIAF) and the Global Infrastructure Facility (GIF).

“This successful credit rating for EVNHANOI is a continuation of the World Bank’s support to the energy sector to develop a sustainable financing strategy,” said Stefanie Stallmeister, Acting Country Director for the World Bank in Vietnam. “The credit rating demonstrates the strong operational and commercial performance of Vietnam’s power companies and is expected to attract much-needed commercial capital to the sector”.

According to Fitch, EVNHANOI’s credit profile is supported by its dominant market position in electricity distribution in the capital of Hanoi, its stable and diversified customer base, and low receivables. If EVNHANOI can maintain financial performance and establish track record of independent tariff setting mechanism and automation, its stand-alone rating can be further strengthened.

EVNHANOI supplied power to more than 2.5 million customers in Hanoi in 2019, generating revenues of more than VND 40 trillion (US$1.7 billion). EVNHANOI manages and operates an electrical grid system which provides electricity for an economic hub which sees an average consumption growth of 10 percent per year.  

This activity is part of the World Bank’s long-term engagement with the Government of Vietnam to find new ways to channel private investment into the electricity sector. The World Bank estimates that the sector will need to mobilize about US$10 billion of investment annually through 2030, of which, EVN itself would need to mobilize estimated US $5 billion annually.

For more details on the Fitch ratings, please visit here.


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