Fitch, a renowned rating agency, has recently released a report evaluating the progress of the spin-off of coal assets from Polish energy companies under the NABE project. According to the report, this development holds promising implications for the credit profile of these energy companies. By divesting their coal assets, these companies are effectively mitigating business risks, bolstering their debt capacity, and positively impacting their Environmental, Social, and Governance (ESG) profiles.
“The positive assessment of the internationally recognised agency for the spin-off of coal assets from PGE is the best review of the effects of a process entering its final stage. It shows that the transaction is well perceived by financial institutions – providers of capital for investment. This is good news for Poles, as PGE’s efficient operations will allow the company to fully exploit its potential in the implementation of the energy transformation in Poland, whose most important objective is to reduce the cost of electricity, with benefits for households, companies, and the economy as a whole,”
explains Wojciech Dąbrowski, President of the Management Board of PGE Polska Grupa Energetyczna.
The report emphasizes that this transfer of assets will notably enhance the business profiles of energy companies by eliminating the high risk associated with coal assets. This risk stems from the EU’s decarbonization policy, resulting in significantly increased costs related to CO2 emissions, decreased profitability and utilization of coal-fired power plants due to the rise of renewables, and constrained access to external financing due to restrictions for key investors, including banks.
Furthermore, Fitch observes that the spin-off of coal assets will bring Polish power companies closer in business profile to their foreign competitors. As the transfer of assets progresses, Fitch plans to review the ratings of energy companies and anticipates that the updated ratings will reflect the companies’ improved debt servicing capacity.
