Fitch Affirms Uzbekistan Thermal Power Plants at BB

Tashkent, Uzbekistan (UzDaily.com) — Fitch Ratings has confirmed the long-term issuer default rating (IDR) of Uzbekistan-based electricity generation company Thermal Power Plants Joint Stock Company (TPP) at BB with a stable outlook.

The rating is aligned with the sovereign rating (BB/Stable) under Fitch’s criteria for government-related entities (GRE), as nearly all of the company’s debt is either guaranteed by the state or provided by government sources.

TPP’s standalone credit profile (SCP) remains weak at ccc due to high leverage, limited cash flow transparency, short-term tariff regulation, and a concentrated business profile. Positive factors include a large market share and expected positive free cash flow (FCF) supported by a moderate capital program.

By mid-2025, approximately 97% of TPP’s debt was backed by state guarantees or provided through the Ministry of Finance, including loans from international financial institutions and the Reconstruction and Development Fund. The remainder is held by a major state bank and two commercial banks.

In May 2025, TPP sold an 80% stake in a newly established company owning the 900 MW Talimardjan gas-fired power plant to investors from the UAE. The transaction included both cash payments and investor obligations to service the construction loans of the transferred assets, with part of the debt remaining consolidated on TPP’s balance sheet.

The company’s debt rose to 30.6 trillion sum (≈US$2.4 billion) following the Talimardjan plant debt consolidation. The new 1.1 GW capacity at Talimardjan, expected to come online in Q2 2026, is projected to operate with a 40–45% margin, boosting EBITDA generation and free cash flow.

Between 2026 and 2028, around 80% of TPP’s EBITDA will be generated by Talimardjan and Turakurgan power plants, limiting business diversification. Almost all revenue and 70–80% of expenses are state-regulated, with the main electricity buyer being JSC Uzenergosotish. Since May 2025, tariffs on most plants increased by 7%, with further rises expected in 2026.

The government owns 100% of TPP shares, approves strategy, capital expenditures, and tariffs, and provides liquidity support through budget allocations, deferred payments, and dividend waivers. Fitch notes that systemic default risk is low, given the extensive state-backed debt guarantees.

Comparable Uzbek energy companies, including REPN (BB/Stable; SCP ccc) and Uzbekhydroenergo (BB/Stable; SCP b+), are similarly rated in line with the sovereign. International peers such as Kazakhstan’s Samruk-Energy and Kazakhstan Utility Systems exhibit higher transparency and revenue visibility.