Fitch Assigns Vidullanka PLC First-Time A+(lka) National Rating; Outlook Stable

Fitch Ratings has assigned a National Long-Term Rating of ‘A+(Ika)’ with a Stable Outlook to Sri Lanka based renewable power producer Vidullanka PLC. At the same time, the agency has assigned a National Short-Term Rating of ‘F1(lka)’ to Vidullanka’s two issuances of unlisted commercial paper of LKR100 million each.

The ratings reflect Vidullanka’s weak counterparty, Ceylon Electricity Board (CEB, B(lka)/Stable), which is offset by the power producer’s relatively strong cash flows from overseas operations, small operating scale, long-term power purchase agreements (PPAs) with fixed tariffs, and modest financial profile amid a significant increase in domestic funding costs.