NamPower has been recognized by Fitch Ratings for its robust financial profile, surpassing international peers such as Eskom (South Africa), PGE Polska Grupa Energetyczna S.A. (Poland), and Saudi Electricity Company (Saudi Arabia) in terms of Funds From Operations (FFO) net leverage.
According to Fitch Ratings, NamPower’s financial resilience is supported by its conservative capital structure and effective debt management. The credit agency highlighted that among its international peers, which include Eskom, PGE Polska Grupa Energetyczna S.A. (BBB/Stable), and Saudi Electricity Company (A+/Stable), NamPower’s financial profile stands out as the strongest in terms of FFO net leverage.
The global ratings agency,however, noted that despite this achievement, NamPower faces several challenges due to its smaller scale, volatile profitability, and reliance on imported electricity, as well as the performance of the Ruacana hydroelectric power plant.
“These factors are partially balanced by NamPower’s monopolistic role in energy trading and transmission, a partly cost-reflective tariff framework, and a conservative capital structure.”
Fitch Ratings noted that the company’s business profile is weakened by its dependence on hydrology-driven energy output from Ruacana and the costly electricity imports, which accounted for 45% of its supply in 2024.
“Fitch expects NamPower to remain reliant on imported electricity, but with a sharp reduction from 2027 as new generation capacity comes online. Energy imports accounted for 45% total output in FY24 (58% in FY23), mostly from Zimbabwe Power Company (ZPC) and Zambia Electricity Supply Corporation (ZESCO), followed by Eskom Holdings SOC Ltd (B/Stable; 24%). NamPower has renewed its contracts expiring in 2025 with Eskom and ZPC till 2027 and 2030, respectively, while no contracts are due for renewal in 2026.”
In line with these factors, Fitch Ratings affirmed NamPower’s Long-Term Issuer Default Rating (IDR) at ‘BB-’ with a Stable Outlook. This rating reflects NamPower’s strong ties to the Namibian government and its strategic role in the country’s energy sector, aligning with Namibia’s sovereign credit rating.
Fitch Ratings further explained that NamPower benefits from solid oversight and decision-making processes, alongside a track record of government support. However, these factors have not been enough to uplift NamPower’s rating, as its standalone credit profile (SCP) of ‘bb-’ is already in line with Namibia’s sovereign rating.
“The rating affirmation mainly reflects strong links between NamPower and Namibia (BB-/Stable), according to our Government-Related Entities (GRE) Rating Criteria,” Fitch Ratings stated.
