BEH or the Bulgarian Energy Holding might potentially close a green bonds offering in order to support the country’s energy transition, according to analysts.
The news arrive after the credit rating of BEH was updated from BB- to BB with positive outlook by the Fitch rating agency on May 10.
According to Fitch, the current high debt of BEH is set to decline and reach a level of 50 percent by the end of 2021, and continue to decrease to 20 percent by 2023.
Another important reason for the BEH’s rating upgrade is the Bulgaria’s credit rating increase to BBB, as well as the solid government support BEH gets, in the form of state guarantees that will maximize the share of state guaranteed debt.
According to some investment bankers that cover central and eastern Europe, Bulgaria has a solid credit rating and furthermore this can be used by the major agencies as a guarantee for future debt issuance whether it is in the form of sustainability-linked bonds (SLB) or green bonds.
Another thing is state companies in the energy sector could also be listed as long as they initiate green bond framework and prepare a platform with renewable projects.
Fitch, Moody’s, and S&P rated Bulgaria with BBB/Baa1/BBB credit ratings.
Some experts claim that the Maritsa East 2, a coal-fired plant and NEK utility might have a potential to close a green bonds offering or issue SLB.
Maritsa East 2 could get BEH as a guarantor if it switches from the coal production to gas. The company could also draft a future plan to establish wind or solar capacities in the Maritsa basin.
According to another banker that covers the central and eastern regions of Europe, NEK is the company that is most likely to attract interest from the investors, because it runs hydro power plants and is better suited for the issuance of green bonds. A solid programme for redevelopment of these hydro plants, could give the company a clean slate for green bonds issuance which would be the best funding option.
Source: ICIS