S&P affirms Kazakhstan Electricity

Standard & Poor's said it affirmed its BB+ long-term corporate credit rating on Kazakhstan-based Kazakhstan Electricity Grid Operating Co.

The outlook remains stable.

The rating continues to reflect the company's aggressive financial policy, as a result of an ambitious grid renovation and development program, S&P said. The rating is further constrained by the company's high exposure to foreign currency and floating interest risk, the operational challenges arising from the implementation of its north-south construction project and the relatively weak characteristics of the national power sector, the agency said.

These risks are offset by the company's strategic importance to the Republic of Kazakhstan (foreign currency BBB/stable/A-3, local currency BBB+/stable/A-2), strong support and relatively supportive tariff regulation, S&P said, adding that the rating is further supported by its continued monopoly position in a relatively stable electricity transmission business.

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