Standard and Poor's today upgraded Enemalta to BB- rating, up from B+ last year. In a statement, the Department of Information said the upgrade reflects Standard and Poor's view that Enemalta's restructuring efforts are progressing faster than expected.
The decision to upgrade the rating was based on Standard and Poor's independent assessment. Enemalta' stand alone credit profile was also upgraded to B-.
The DOI said that from a situation of multiple downgrades, under the previous administration, this Government's plan has led Enemalta to various upgrades, particularly in its stand-alone credit profile. From downgrades and a negative outlook, Enemalta has now been upgraded from B+ to BB- at the same time that tariffs have been reduced for families and businesses.
Standard and Poor's also noted that tariffs in Malta were reduced twice to support economic growth. According to S&P, this measure proved to be effective.
"From a loss making company, this Government has managed to turnaround Enemalta and the upgrade reflects its journey to financial sustainability," the DOI said.
It continued: "This positive assessment is attributed to the improvements achieved through the transformation of Enemalta, which is delivering improvements in its structures earlier than expected, to the ongoing investment to shift to a more efficient energy generation mix, as well as substantial improvement in liquidity."
Standard and Poor's also noted the transition to private sector generation investments, which include the shift to natural gas.
Minister Konrad Mizzi welcomed Enemalta's upgrade and Standard and Poor's latest report as a testament that the Government's efforts are reaping benefits. "Government has achieved what was considered as impossible by the previous administration. The €320 million investment by Shanghai Electric Power, the reduction of tariffs by €80 million, the private sector investments leading to a shift to clean gas, the closure of Marsa Power station, and the accelerated investment in renewable energy and the electricity grid are leading to economic, social, environmental and health benefits for all". Mizzi thanked the Enemalta leadership and staff for their dedication and for embracing change.
Ing. Fredrick Azzopardi, Enemalta’s Executive Chairman, expressed the company’s satisfaction at this development. He thanked Enemalta’s employees, customers and other stakeholders for contributing to this unprecedented turnaround. “The review presented by S&P confirms that we are heading in the right direction in our effort to secure the future of Enemalta and of the electricity services we offer in the Maltese Islands. We are glad to note that rating agencies that had repeatedly criticised Enemalta’s performance in the past are now considering our Company with a more positive outlook.”
However, Ing. Azzopardi added, this result is no grounds for complacency. “We are currently investing in multi-million projects to upgrade the national grid and reduce the frequency and duration of electricity supply interruptions. Along with our strategic partners, we are introducing a new electricity generation mix based on cleaner, more efficient resources. We are also taking several measures to streamline our administrative operations and improve the quality of services to our customers.”