Fitch Downgrades KEGOC on Sovereign Rating Action



Astana                                                                                                                                                    11 May 2016


Link to Fitch Ratings' Report:  Fitch Downgrades Six Kazakh Corporates on Sovereign Rating Action

Fitch Ratings-London - 05 May 2016: Fitch Ratings has downgraded the ratings of KEGOC following its recent downgrade of Kazakhstan. A full list of rating actions is available at or by clicking the link above. 

The core rationale for these rating actions is the direct impact of the sovereign downgrade on the ratings of state-owned entities. For each issuer's Key Rating Drivers, Rating Sensitivities and Key Assumptions see our most recent rating action commentaries, referenced below:


Kazakhstan Electricity Grid Operating Company (KEGOC) JSC (KEGOC; Long-term Foreign Currency IDR downgraded to 'BBB' from 'BBB+'; Outlook Negative)

KEGOC's ratings are aligned with those of Kazakhstan. The ratings continue to reflect overall strong links with the government, albeit with weakening legal ties. Fitch expects timely support in case of need, including should financial covenants need to be waived or renegotiated. 

The Negative Outlook reflects Fitch’s view of weakening support of KEGOC by its dominant, indirect shareholder - the Republic of Kazakhstan, especially in light of a decline in the share of state-guaranteed debt and high dividend payout policy of no less than 40% (100% in 2015) following its partial IPO. Fitch is likely to downgrade KEGOC by one notch if the guaranteed debt falls below 40% of total (44% at 9M2015). 


     Contact details

    59 Tauyelzisdik Ave, Almaty District, Astana
    Republic of Kazakhstan, 010010
    Tel.: +7 (7172) 690-468, +7 (7172) 690-203
    Fax: +7 (7172) 690-455


About the Company:

KEGOC is the System Operator of Unified Power System of Kazakhstan, and it owns and manages the assets of the National Power Grid (NPG). The company is the natural monopoly. It owns about 24.9 thousand km of 35-1150 kV electricity transmission lines and 77 electrical substations with 36.2 MVA of installed transformer capacity. These lines and substations form the NPG. The company employs more than 4.8 thousand people. More detailed information about the Company is available at its corporate