MUSCAT: According to Fitch Ratings, the start of the electricity spot market in the Sultanate of Oman, the first of its kind in the Middle East, constitutes an additional step towards increasing the transparency and efficiency of the electricity sector, and its liberalisation in the future.
In a new report published on its website, it has reported that the recently announced restructuring of the electricity sector will not have an immediate impact on the ratings of Mazoon Electricity Company, which is affiliated with the Oman Investment Authority.
The report stated, “We expect the government to maintain its indirect ownership in Mazoon, and we believe that it is unlikely that the restructured network operator will be valued less than the current rating of Mazoon.”
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Fitch believes that the prolonged restructuring process could put pressure on Mazoon’s liquidity, by postponing its long-term financing plans, as Mazoon relies on long-term financing to meet the resulting rise in capital expenditures in 2022.
The report also added that this could be mitigated through new financing facilities, or through direct support from the Electricity Holding Company in the short term.
