Specifically, Electrica’s Long-Term Issuer Default Rating (IDR) and senior unsecured debt rating were affirmed at ‘BBB-’, with a Stable Outlook. The rating affirmation reflects Electrica’s electricity distribution operations, which generate most of its EBITDA, within a stable regulatory framework, although less mature than that in Western European countries, Fitch says in a report analyzed by Profit.ro.
The rating also took into account the agency’s expectations for the “normalization” of the profitability of the supply business, as well as a growing contribution from renewable generation as the group implements its investment plan through 2031.
“The Stable Outlook reflects the expectation that net debt to funds from operations (FFO) will remain below the revised negative sensitivity threshold, despite high capital expenditure, and that the impact of the electricity supply emergency in Romania, caused by drought, will remain manageable,” according to the report.
The credit rater noted that the company’s rating could be upgraded by up to two notches above Romania’s, currently at ‘BBB-/Negative Outlook’, given the “weak” link between Electrica and the Romanian state, its main shareholder.
Factors that could lead to a positive revision include achieving and sustaining net debt to FFO below 3.0x, combined with FFO interest coverage above 4.0x, as well as implementing a “clearly defined” financial policy that is consistent with a higher rating.
Electrica’s current strategy envisions a significant expansion of investments through 2031, including up to 1 GW of new renewable capacity, 900 MWh of battery storage capacity and the Craiova cogeneration project. Fitch estimates capital expenditure of approximately RON 14 billion for Electrica over 2026-2031, with 51% of the amount allocated to network modernization, 38% to renewables and storage, and 10% to the Craiova project.
The program will generate negative free cash flow (FCF) throughout most of the investment cycle, but should support long-term growth, according to the rating agency.
Fitch also noted that the planned growth in renewables and storage will gradually transform Electrica from a network operator with predominantly regulated activity into a utility provider with a more integrated model. The agency estimated that unregulated activities will contribute an average of approximately 28% of EBITDA in 2026-2030 and around 40% by 2031 (compared with 23% in 2025).
Romania is set to remain under an electricity supply crisis regime until the end of September, following disruptions caused by drought affecting nuclear generation, which have led to a significant increase in wholesale electricity prices.
“We consider Electrica to be well positioned to manage this situation, having already contracted considerable volumes for its 2026 supply needs and benefiting from regulatory mechanisms that support the recovery of distribution-related costs through future tariffs,” Fitch said in its report.
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