Fitch Ratings has upgraded Public Power Corporation S.A.’s (PPC) Long-Term Issuer Default Rating (IDR) to ‘BB’ from ‘BB-’ and has revised its Standalone Credit Profile (SCP) to ‘bb’ from ‘bb-’. The Outlook on the IDR is Stable.
The upgrade reflects Fitch’s expectation that PPC’s accelerated renewables expansion through 2030 will strengthen its business profile by enhancing geographic diversification, improving integration with supply and reducing exposure to legacy thermal generation. The growth strategy will modestly dilute the contribution of regulated earnings, but Fitch expects the overall credit impact to be positive.
The strategy entails significant execution risk and will result in persistently negative free cash flow (FCF) and temporary releveraging. Nevertheless, Fitch expects PPC’s leverage metrics to be consistent with the ‘BB, especially given the revised debt capacity. The upgrade is also supported by the public financial policy aimed at keeping reported net debt / EBITDA below 3.5x by 2028.
Key rating drivers:
Improved Scale, Diversification and Integration: The 2030 strategy accelerates PPC’s transformation into a larger, more diversified integrated utility, increasingly focused on clean generation and supply activities. By 2030, the group’s generation asset base is expected to double from 2025. Geographic diversification will also improve by 2030 throughout expansion across Central and Southeastern Europe (CSEE) markets, reducing reliance on Greece and Romania. PPC is also developing new growth opportunities in high-demand sectors such as data centres, as a power purchase agreement (PPA) provider and the lessor of non-IT infrastructure.
The integrated (generation and supply) business attracts 69% of the EUR24 billion gross investment plan (2026-2030) announced in May. The growth strategy is aligned with favourable long-term electricity demand growth and supportive power market fundamentals in the CSEE region, strengthening the balance between generation and supply activities and providing earnings diversification and sustainable growth. As a result, we have revised debt capacity up by 0.5x, with a negative sensitivity of 5.0x at ‘BB’.
Execution and Policy Sensitivity: PPC remains exposed to execution risk on the renewables and flexible generation build-out, timely lignite decommissioning, unwinding of working-capital related to state receivables and funding of around 31% of total capital needs in the debt markets, including hybrids. The upgrade assumes the successful delivery of the strategy and supportive policy frameworks in Greece and Romania, with ongoing commitment to the public financial policy of below 3.5x net debt to EBITDA on a reported basis.
Renewables, Flexible Generation Drive Growth: Renewable generation is PPC’s primary growth engine, supported by a sizeable and increasingly mature project pipeline (22GW, of which 12GW is to be commissioned by 2030) with good visibility to 2028 (100% under construction, ready to build or in tender process). Investment in flexible generation, storage and new gas-fired plants supports system reliability, mitigates price volatility and strengthens integration benefits, while reducing carbon exposure. We expect renewables to contribute about 32% of EBITDA by 2028, up from about 13% in 2025.
Flexible Capacity Strengthens Earnings: Flexible generation is central to PPC’s strategy to mitigate structural price volatility, curtailment risk and tightening capacity balances in the region. Key projects include the Alexandroupoli combined cycle gas turbine (CCGT), conversion of lignite-fired Ptolemaida V to gas, new peaking capacity in Romania, alongside the retirement of ageing, inefficient gas plants. Batteries development of about 0.8GW and 0.5GW of pumped hydro projects by 2030 enhances system flexibility and supports earnings from balancing services.
Lower Share of Regulated Networks: Regulated activities will decline to around 29% of EBITDA by 2028 from 38% in 2025, as PPC directs most growth capex towards renewables and flexible generation. Regulated asset base (RAB) growth should remain positive but will be outpaced by the expansion of unregulated businesses. Regulated oil-fired generation will also shrink as island interconnections and renewables replace legacy assets. This contrasts with the growing network focus of many Western European utilities and limits PPC’s debt capacity relative to peers. Regulatory resets in Greece (2029) and Romania (2030) could support a renewed increase in network investment.
Capex-Driven Leverage Increase: The successful EUR4.5 billion equity raise, including the EUR250 million treasury share placement, significantly strengthens PPC’s short-term balance sheet and mitigates funding risk. However, we expect the investment programme to keep FCF deeply negative and drive a temporary increase in leverage, peaking at 5.4x in 2028, above the revised negative sensitivity of 5.0x, with a reduction thereafter. This will constrain financial flexibility in 2028-2029, but we look through it since leverage should improve as projects are commissioned. Our rating case assumes the issuance of hybrid debt to maintain credit metrics in line with PPC’s financial policy.
Romanian Policy-Driven Liquidity Risk: Delayed state compensation under Romania’s retail price cap scheme created working-capital pressure for suppliers in 2024-2025. Reimbursements lagged deliveries by nine to 12 months, resulting in high government-related entities’ (GREs) receivables and increasing short-term funding needs. PPC disclosed over EUR350 million of state-related receivables in 2025. Management expects an almost full recovery following abolition of the scheme in July 2025 and court-mandated payments, although timing remains subject to government payment discipline. We have therefore assumed conservative cash-in assumptions.
Standalone Approach: We assess the precedent of support as ‘Strong’, due to PPC’s legacy state-guaranteed debt, although this is set to materially decrease. We also view contagion risk as ‘Strong’, due to large supranational funding and Greek banks’ exposure to PPC. However, we assess decision-making and oversight, and the preservation of public role as ‘Not strong enough’, given the state’s 33.4% ownership with no enhanced governing or voting rights. The overall assessment leads to a standalone rating approach, with the ‘BB’ IDR, the same as the SCP.
Για να εμφανίζονται περισσότερα άρθρα της Ναυτεμπορικής στις αναζητήσεις σας εύκολα και γρήγορα, πρέπει να προσθέσετε το site στις προτιμώμενες πηγές σας. Μπορείτε να το κάνετε πηγαίνοντας εδώ.
