NEA ‘AA+’ Credit Rating 2024: A Sign of Strong Growth
16th February 2025, Kathmandu
The Nepal Electricity Authority (NEA) has received a ‘Double A Plus’ rating for the third consecutive year. This recognition was awarded by ICRA Nepal Ltd., which assessed the NEA’s financial health, business risks, management capacity, and operational effectiveness.
NEA ‘AA+’ Credit Rating 2024
ICRA Nepal’s Comprehensive Assessment
ICRA Nepal rated NEA as “ICRA NP Double A Plus” after analyzing various factors, including financial stability, assets, management competence, and internal and external operational factors. This rating indicates that NEA is highly capable of meeting its financial and economic obligations on time.
Improved Financial Health
In recent years, NEA’s financial condition has improved significantly. The authority reported a profit of NPR 1.46 billion in the fiscal year 2080/81, compared to a loss in previous years. Additionally, NEA has drastically reduced electricity leakage rates from 25.78% in FY 2072/73 to 12.73% in FY 2080/81.
Commitment to Financial Responsibility
ICRA Nepal’s rating reflects the NEA’s strong ability to manage its financial obligations. The rating reduces the risk of delayed payments and highlights NEA’s solid creditworthiness, making it a reliable partner in financial transactions.
Plans for Future Growth
NEA’s Executive Director, Kulman Ghising, shared plans to issue shares once approval from the government is received. The funds raised will be used for large-scale hydroelectric projects, improving the country’s electricity production, and ensuring a more reliable and sustainable power supply.
NEA’s authorized capital is around NPR 300 billion, with plans to issue shares at an estimated price of NPR 300 per share, including a premium. The NEA’s annual income exceeds NPR 116 billion, with assets surpassing NPR 700 billion.
Successful Track Record and Creditworthiness
Since 2073/74, NEA has been on a positive financial trajectory. After recovering from a loss of NPR 8.89 billion in FY 2072/73, the authority achieved consistent profitability. It is now in a solid position, with accumulated reserves of NPR 47.41 billion, up from a loss of NPR 34.61 billion in FY 2072/73.
Looking Ahead
Ghising emphasized that NEA’s ability to meet financial responsibilities and its sound financial health provide a strong foundation for future projects. The authority aims to further enhance its operational capacity, improve financial efficiency, and expand its customer base.
With a solid record of reducing financial and technical losses and a strong credit rating, NEA is poised to remain a key player in Nepal’s energy sector.
For more: NEA ‘AA+’ Credit Rating 2024
