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Rating action

Scope Ratings GmbH (Scope) has today affirmed the A- issuer rating of Eviny AS with a Stable Outlook. Scope has also affirmed the senior unsecured debt rating at A- and the short-term debt rating at S-1.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: BBB (unchanged). Eviny's business risk profile is characterised by its vertically integrated business model, which encompasses regulated and unregulated activities, robust profitability, and a diversification profile that is showing signs of improvement, though it is constrained by geographic concentration and exposure to volatile power prices.

Eviny is Norway's fifth-largest hydropower producer, with operations in environmentally friendly and cost-efficient hydropower production (positive ESG factor), and it has an annualised generation of about 9 TWh following the acquisition of two wind farms in 2024 (Guleslettene and Tellenes). These assets increased generation by around 20%, introducing exposure to NO2 and NO3 price zones and improving geographic diversification while reducing concentration in NO5. The company also benefits from regulated electricity distribution through its subsidiary BKK, which accounts for around 20% of group EBITDA and provides stable, predictable cash flows. However, Eviny continues to exhibit asset concentration, with the three largest hydropower plants contributing around 33% of total generation capacity. Horizontal diversification is moderate as unregulated generation dominates EBITDA; though vertical integration is supported by a sizeable customer base and complementary businesses, such as EV charging infrastructure and telecoms services. Business risks remain, due to the company’s high dependency on factors beyond its control, such as volatile power prices and limited hedging activities, as well as its restricted geographical diversification.

Profitability remains a core credit strength. Eviny’s low-cost, highly flexible hydropower portfolio is supported by significant reservoir capacity (37% of mean production) and advanced, algorithm-based production optimisation. This enables the company to capture peak-load prices and achieve a value factor above spot. Furthermore, the wind farms enhance cash flow stability, with 86% of expected output under long-term power purchase agreements at fixed prices. Scope expects the group to maintain an Scope-adjusted EBITDA* margin of around 60% and a ROCE above 20%, which are both among the strongest in the Norwegian peer group.

Financial risk profile: A- (unchanged). Despite a weakening of leverage and interest cover metrics following the acquisition of two wind farms in 2024, Eviny’s financial risk profile remains strong, supported by robust cash flow generation and solid debt protection metrics.

Wind farm acquisitions and lower NO5 prices meant that debt/EBITDA rose to 3.0x in 2024 from 1.3x in 2023. However, Scope expects this ratio to decline to around 2.5x in 2025 and to remain at this level thereafter. This is underpinned by the company's commitment to maintaining a credit profile that corresponds to a high investment grade rating, and no further large-scale acquisitions are planned in the medium term. Eviny continues to optimise its structure and sharpen its focus on core activities. This includes divesting non-core operations, such as the sale of Eviny Solutions to AF Gruppen, while maintaining strict cost discipline and pursuing efficiency gains. The company also aims to increase recurring cash inflows, thereby reinforcing its robust internal financing capacity.

Scope already anticipated a weakening of interest coverage due to the increased interest stemming from the debt-financed acquisition of wind farms, falling to 9.6x in 2024 from 33x in 2023. Despite higher interest costs and a larger debt base, interest coverage remains strong, with a projection of 9x–10x over the next few years. This is a reflection of Eviny's ability to generate stable operating cash flows, even when the power price curve settles at a lower level and remains flatter.

Scope expects cash flow generation to remain positive, with a free operating cash flow (FOCF)/debt ratio of 5–10%, even as annual capital expenditure (CAPEX) rises to NOK 2.5–3.0bn. This increase is mainly driven by grid investments, which account for around 45% of total capex, and continued expansion in electrification infrastructure. Eviny’s ability to maintain positive FOCF despite elevated investment needs highlights its solid internal financing capacity.

Liquidity: adequate (unchanged). Liquidity is supported by cash reserves of around NOK 2bn, committed undrawn facilities of NOK 3.5bn, and a positive FOCF of between NOK 0.8-1.3bn per annum over 2025-2027. According to Scope’s calculations, this comfortably covers upcoming maturities of NOK 3.5bn in 2025, NOK 3.1bn in 2026 and NOK 4.2bn in 2027. Eviny has strong access to the banking and capital markets, including frequent bond and commercial paper issuance.

Supplementary rating drivers: +1 notch (unchanged). The rating incorporates a one-notch uplift to the standalone credit assessment of BBB+, resulting in an issuer rating of A-. Scope has applied a bottom-up approach under the framework outlined in Scope’s Government Related Entities Methodology, reflecting a conservative assessment of the public sponsors’ high ability to provide a credit uplift and their medium willingness to provide financial support if required (which is considered unlikely). This uplift is consistent with that applied to all other Norwegian regional utilities rated by Scope which are majority-owned by one or more municipalities.

One or more key drivers of the credit rating action are considered an ESG factor.

Outlook and rating sensitivities

The Stable Outlook incorporates Scope's expectation that leverage will stabilise at around 2.5x. This is supported by an EBITDA margin of around 60% and a ROCE of over 20%.

The upside scenarios for the ratings and Outlook are (individually):

1. Leverage standing below 1.5x on a sustained basis
    
2. Improvement of the business risk profile, e.g. through further improved diversification or operating profitability

The downside scenarios for the ratings and Outlook are (individually):

1. Leverage standing at 3.0x or above on a sustained basis
    
2. Change in the company’s status as a government-related entity (deemed remote)

Debt ratings

Scope has affirmed the A- rating on senior unsecured debt issued by Eviny AS, in line with the issuer rating.

Scope has affirmed the rating on the short-term debt issued by Eviny at S-1. The rating is based on the underlying A-/Stable issuer rating and reflects better-than-adequate liquidity cover as well as better-than-adequate access to bank funding and the capital markets.

Environmental, social and governance (ESG) factors

As a producer of clean hydroelectric and wind power, Eviny’s business model is centred on sustainability and aligns with the UN’s Sustainable Development Goal 7 (Affordable and Clean Energy). The company’s carbon intensity is very low, at less than 28 gCO₂e/kWh, which signals its commitment to this goal. This position rules out transition risks and ensures the high utilisation of the hydro and wind power generation portfolio, as well as a strong position in the merit order, high margins and robust cash flow generation.

All rating actions and rated entities

Eviny AS

Issuer rating: A-/Stable, affirmation

Short-term debt rating: S-1, affirmation

Senior unsecured debt rating: A-, affirmation

*All credit metrics refer to Scope-adjusted figures.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; European Utilities Rating Methodology, 17 June 2025; Government Related Entities Rating Methodology, 3 September 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication/. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings' internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Thomas Faeh, Executive Director
Person responsible for approval of the Credit Ratings: Sebastian Zank, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 22 August 2018. The Credit Ratings/Outlook were last updated on 26 September 2024.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use/exclusion of liability
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