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Fitch Ratings anticipates a surge in electricity demand across the Asia-Pacific (APAC) region, propelled by robust GDP growth and easing inflationary pressures.
Governments in the region are expected to intensify efforts in transitioning to clean energy, leveraging policy initiatives, sectoral reforms, innovative technologies, cost-effectiveness, and green financing, despite challenges posed by stretched fiscal positions. The report suggests that APAC power project developers will leverage local financing options until US dollar interest rates become more competitive. While Fitch's outlook on issuer ratings remains mostly stable, limited rating changes are anticipated over the next 12 months. Project companies are deemed resilient against demand risks, shielded by contractual or regulatory protections. Among Fitch-rated transactions, one is on a Positive Outlook aligned with the sovereign rating, while two groups within Azure Power India Private Limited face a Rating Watch Negative due to corporate governance concerns. Despite these considerations, the report notes that all 17 transactions in Fitch's portfolio boast sufficient liquidity to weather shocks, with cash collection on an upward trajectory. However, some Indian companies face lower headroom due to currency depreciation. (ANI)
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