Tashkent, Uzbekistan (UzDaily.uz) — International rating agency Fitch Ratings assigned JSC National Electric Grids of Uzbekistan (NEGU) a first-time Long-Term Issuer Default Rating of ‘BB’ with a Positive Outlook on 3 November 2026.
The rating is aligned with Uzbekistan’s sovereign rating, which is also ‘BB’ with a Positive Outlook. Fitch Ratings reported this.
The agency cites the share of state-guaranteed debt as the main reason for aligning the company’s rating with the sovereign rating. Around 90% of the company’s debt at the end of 2025 and in the first half of 2026 was either backed by state guarantees or provided directly by the state.
Most of this debt consists of loans from international financial institutions. Fitch expects the share to remain above 75% at least until 2028, even if some new investment projects are financed without guarantees. If the share falls below 75%, the agency may change its approach to determining the rating.
Fitch assesses the company’s standalone credit profile at ‘b’. This assessment is constrained by the country’s short track record of regulation and its limited transparency, risks related to transmission volumes and counterparties, and weak financial flexibility.
Factors supporting the company include its monopoly in electricity transmission, sector reforms, including the separation of trading activities, and projected high profitability. Fitch says the assessment could improve as a track record of fair regulation develops.
Following the establishment of a single buyer in 2024, NEGU gradually separated its loss-making trading activities. Fitch believes this has improved the company’s profitability and reduced cash flow volatility.
The government plans to complete the transition to tariffs based on a regulated asset base from 2027. Some elements of the new system were introduced when tariffs were revised in August 2026. Following three increases in 2025–2026, NEGU’s electricity transmission tariff in August 2026 was twice its 2024 level.
The company itself expects tariffs to be indexed by around 5% annually from 2027. Fitch’s projections assume an increase of around 11% in 2027 and approximately 5% annually from 2028.
At the same time, the agency points to limitations in the regulatory framework. The company operates under short-term tariff decisions, while protections against declining transmission volumes, a fair return on investment and the regulator’s response to inflation or depreciation of the soum have not yet been fully tested.
Fitch also identifies potential tariff intervention for political or social reasons and the absence of an independent regulator as risks.
NEGU’s key counterparty, the single buyer, acts only as an intermediary in the flow of funds. The company therefore depends on the payment discipline of end consumers. It also relies on an opaque mechanism for distributing payments among market participants, over which it has no control.
Due to ageing infrastructure and growing electricity demand, the company faces substantial investment requirements. Its business plan предусматривает capital expenditure of US$1.5 billion in 2026–2030. The funds will be used to connect new generation capacity, improve grid reliability and digitalisation, and develop high-voltage transmission lines.
Most projects require government approval and available financing. Multilateral financial institutions are expected to fund around half of the programme, with the remainder covered by public-private partnerships and the company’s own resources.
Fitch forecasts that the company’s free cash flow will be negative in 2026–2030, averaging around 1 trillion soums (US$80 million) annually. EBITDA is projected to average 3.5 trillion soums (US$280 million) per year, while capital expenditure is expected to reach 3.7 trillion soums (US$295 million). The forecast does not include dividend payments. The FFO-adjusted leverage ratio is expected to decline to an average of around 4x in 2026–2029, from 6.7x in 2025.
Around 90% of the company’s debt at the end of 2025 was denominated in foreign currency, while its revenue is generated in soums. Hedging instruments in Uzbekistan are limited. However, Fitch expects moderate depreciation of the soum against the US dollar, averaging 2% annually, which limits the impact of foreign exchange risks on its projections.
Fitch assesses the state’s willingness to support the company as high. The state fully controls NEGU, approves its strategy and investment plans, and sets its tariffs. In 2024–2025, the company received network assets worth around US$400 million from other state-owned enterprises free of charge.
Fitch also takes into account NEGU’s role as a natural monopoly and the strategic importance of its projects for the development of renewable energy and public-private partnerships. The company employs around 9,000 people.
At the end of June 2026, NEGU had cash holdings of 481 billion soums (US$40 million), compared with short-term debt of 546 billion soums (US$46 million). Repayments to unrelated parties in 2027–2029 are expected to amount to around 500 billion soums (US$40 million) annually.
The company plans to cover its negative cash flow through new bank loans. In 2026, NEGU expects to receive US$145 million under guaranteed credit lines from international banks. The government has also signed a US$200 million investment loan agreement with the Asian Development Bank, with the proceeds to be transferred to the company.
The rating could be downgraded if the Outlook on Uzbekistan’s sovereign rating is revised to Stable or if the sovereign rating itself is downgraded.
Another potential trigger would be a fall in the share of guaranteed debt below 75%. An upgrade could follow an increase in the sovereign rating, provided the state continues to guarantee more than 75% of the company’s debt.
