February 28, 2022 | Investopaper
The government-owned Nepal Electricity Authority (NEA) has received a [ICRANP-IR] AA+ credit rating from ICRA Nepal. This rating indicates a high capacity to carry financial and financial obligations on time. Institution with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. They carry very low credit risk.
Credit ratings are used to evaluate the quality of credit of an individual or an organization. The rating is given as a simple indicator of the inherent risk of the institution’s ability to repay its debt obligations.
ICRA Nepal had analyzed the financial condition of NEA, assets, business and financial risks, managerial capacity, internal and external environmental factors affecting operational effectiveness.
NEA signs Long Term Power Purchase Agreements (PPAs) with hydropower projects constructed by domestic and foreign investors. The credit rating results show that NEA has a high level of financial capacity and no investment risk to pay for such projects.