Specifically, the six rated EVN subsidiaries are National Power Transmission Corporation (EVNNPT), Southern Power Corporation (EVNSPC), Hanoi Power Corporation (EVNHANOI), Ho Chi Minh City Power Corporation (EVNHCMC), Northern Power Corporation (EVNNPC) and Central Power Corporation (EVNCPC).
The rating action follows the upgrade of Vietnam's Long-Term Foreign-Currency IDR to 'BB+' from 'BB' on 8 December 2023.
Fitch has also upgraded the senior unsecured ratings of EVN and EVNNPT to 'BB+' from 'BB'.
Key rating drivers
EVN's rating is equalized with the Vietnam sovereign rating under Fitch's Government-Related Entities (GRE) Rating Criteria, reflecting a strong likelihood of support by the state. EVN's Standalone Credit Profile (SCP) is assessed at 'BB', according to Fitch Ratings.
EVNNPT's ratings reflect its SCP of 'BB+', which is at the same level as the IDR of its parent, EVN.
The ratings of five power corporations (PCs) - EVNHANOI, EVNHCMC, EVNSPC, EVNNPC, and EVNCPC - are equalized with that of their parent, EVN, which wholly owns these PCs, in line with Fitch's Parent Subsidiary Linkage (PSL) Rating Criteria.
Fitch assessed EVN's overall incentive to support the five PCs as 'High', based on 'Low' legal and 'High' operation and strategic incentives. Fitch assesses all the PCs' SCPs as 'BB', the same as that of EVN.
The efforts of EVN and its units
In recent times, EVN and its subsidiaries have made efforts to manage operations and supply power in challenging conditions. In 2023, EVN and its subsidiaries have implemented the annual theme "Thrift practice and anti-waste", continuing to deploy digital transformation, promoting solutions for production, power supply, and electricity saving. By the end of 2023, the number of communes that have accessed electricity nationwide reached 100% and the number of households using electricity reached 99.74%, of which rural households access electricity reached 99.6%.
In recent years, EVN has drastically implemented a series of measures, especially applying digital transformation to improve its services and power supply quality. 100% of electricity services are provided online at level 4. Since January 2022, EVN has announced its digital ecosystem - EVNCONNECT, completing the connection with the National Population Database and the electronic invoice system of the General Department of Taxation, 5 months earlier than the Prime Minister's requirement. In 2023, EVN continuously maintains its position in the Top 3 leading ministries and sectors serving people and businesses in providing public services on the National Public Service Portal.
In addition, according to the Provincial Competitiveness Index Report 2022 (PCI 2022) announced by the Vietnam Confederation of Commerce and Industry (VCCI) in April 2023, electricity maintains its leading position in the PCI Infrastructure Index for the 6th consecutive year. Access to electricity is the area that recorded the most positive changes, with 62.5% of firms rating the level of change as Very Good/Good.
Besides, according to assessments of domestic firms, electricity quality is also one of the bright spots in infrastructure quality in 63 provinces and centrally-run cities. The power sector continues to be rated highest in infrastructure quality in 2022 by 1,300 FDI enterprises. Electricity quality is an area that has continued to receive positive assessments from FDI enterprises for many years.
These encouraging results have been recognized by prestigious domestic and foreign organizations as an important motivation for Vietnam Electricity and its affiliated units to continuously further improve the quality of power supply, serving the needs of socio-economic development and people's lives in the coming time.