The rating action follows dispelled concerns about covenant compliance in FY 2023 after a re-definition of the debt service coverage ratio covenant and the execution of a waiver by debtholders.

The rating action signals Scope’s view on an improved credit quality amid reduced construction risks and good operational performance. However, the rating is constrained by uncertainty about technical covenant compliance due to inter-year capex shifts.

The rating actions follow the publication of Scope’s updated European utilities rating methodology which will likely have a positive impact.

The rating is supported by the ongoing capacity expansion that is broadly in line with plan. Credit metrics are likely to remain within Scope’s expectations.

The rating is supported by the rated entity’s protected business model related to regulated energy generation. Persistently high indebtedness coupled with potential adverse regulatory changes and credit-negative governance factors limit the rating.