Rating action

Scope Ratings GmbH (Scope) has today affirmed Akershus County Municipality (Akershus)’s long-term issuer and senior unsecured debt ratings at AAA in both local and foreign currencies, with Stable Outlooks. Scope has also affirmed Akershus’ short-term issuer ratings at S-1+ in both local and foreign currencies, with Stable Outlooks.

Rating rationale

The affirmation of Akershus’ AAA rating is based on:

• A strongly integrated institutional framework for Norwegian counties: The framework ensures financial stability through fiscal equalisation, central grants, and proactive government support, balancing autonomy with oversight to maintain fiscal discipline and address disparities. Scope’s evaluation of the institutional framework places Norwegian counties within an indicative rating range spanning from AAA to AA. This assessment reflects their strong integration with the Norwegian sovereign (AAA/Stable).
   
• A strong individual credit profile. Akershus demonstrates a prudent fiscal management and resilient budget performance, underpinned by a robust and predictable revenue base and ample reserve buffers in the form of multiple funds. The county also benefits from strong liquidity that supports a solid debt profile. Akershus’ credit profile is further strengthened by favourable socio-economic dynamics, including strong population growth and low-risk exposure to contingent liabilities. Challenges are related to the structurally limited budgetary flexibility on both the revenue and expenditure sides.

Key rating drivers

Strong intergovernmental integration with the Norwegian sovereign. Scope’s evaluation of the institutional framework places Norwegian counties, including Akershus, within an indicative rating range of AAA to AA, reflecting their strong integration with the Norwegian sovereign (AAA/Stable). This robust framework underpins their financial and operational resilience, effective governance, and proactive central government support. However, Norwegian counties face challenges such as limited revenue flexibility, dependence on central transfers, and adaptation to recent equalisation reforms.

Norway’s fiscal equalisation system redistributes revenues to offset demographic and regional cost differences, ensuring broadly comparable financial capacity across counties. In parallel to the 2024 split of counties, which also affected Viken, the General-Purpose Grant Scheme was revised. While some counties benefit and others lose, the scheme’s core function of expenditure and income equalisation remains unchanged. Grants typically constitute the majority of operating revenue for all counties (on average around 60%). The second largest income is from tax revenue, while revenues from alternative sources, such as service fees and energy concessions, remain very limited for most counties.

Norway's sub-sovereign support framework is highly predictable, characterised by proactive interventions from the central government, including supervisory oversight and crisis-response mechanisms such as grants and cost compensation. Fiscal discipline is enforced through the Local Government Act, which mandates an operational budget balance and deficit correction within two years. Counties facing imbalances are monitored through the ROBEK registry. In times of crisis, the government has consistently reinforced stability through grants and cost compensation mechanisms, reflecting a credible history of support.

Norwegian counties maintain substantial autonomy in sourcing funds through banks, bonds, and the state-owned Kommunalbanken (KBN), which offers favourable financing aligned with government policy. This underpins the financial resilience of Norwegian counties.

Finally, Norwegian sub-sovereigns play a significant role in national policymaking through effective coordination with the central government and inter-regional cooperation. Mechanisms like KS (Norwegian Association of Local and Regional Authorities) ensure balanced decision-making and stable governance.

Akershus’ strong individual credit profile is driven by its resilient budgetary performance, favourable debt profile, ample reserves, strong liquidity and favourable economic prospects.

Resilient budgetary performance. Akershus benefits from a robust revenue structure, where the main revenue sources of framework grants and tax revenues are complemented by dividend income from shareholdings, mainly Akershus Energi AS. The presence of a reserve fund (NOK 652.6m as of end 2024, or 5.7% of operating revenue) further strengthens the budgetary resilience. In 2024 Akershus recorded a tax revenue shortfall of NOK 253.7m compared to the revised budget (around 2% of operating revenue), mainly reflecting weaker-than-expected growth in withholding tax and advance tax payments. The impact was offset by a higher allocation from the income equalisation system (NOK 176.1m), alongside the cancellation of planned loan use and transfers and tight expenditure control. Income in the financial area – such as dividends from Akershus Energi AS, net interest income and gaming funds – increased and was NOK 141m above budget. This resulted in an adjusted net operating profit of 0.8%, below the expected 1.5%, but above the national average for the county municipalities of 0%.

As of August 2025, tax revenue growth in Akershus was robust at 6.8% year-on-year, although remaining below the 8.2% average for the counties and the 8.8% estimate in the national revised budget 2025. A 6.8% tax revenue growth throughout the year would result in NOK 20m lower free revenue than budgeted. However, if this shortfall were to materialize, it would likely be offset by reallocating unused budget funds from other county areas.

At the same time, Akershus faces pressures on operating expenditures. These expenditures are driven by several factors, including high personnel costs, increasing service expenditures — particularly in the education and public transportation sectors — and the growth of the population in the county.

Balancing these pressures, Scope expects Akershus' budgetary performance to remain robust and maintain moderated financial flexibility in the medium term. This is reflected in an adjusted net operating profit of 2.7% of operating revenues on average over 2026-29, below the self-imposed target and the county sector recommendation from the Norwegian Association of Local and Regional Authorities (KS) of 4%, but close to the 2.8% level KS recommends specifically for Akershus. Tax revenues are expected to be bolstered by an overall population growth of 1.2% on average between 2026 and 2029, above the national average of 0.8%. This will help to compensate for the effect of unfavourable changes in the expenditure equalisation system, which are expected to reduce the county’s framework subsidies by NOK 113m in 2026. Moreover, the reserve fund is expected to remain at 4.5% of operating revenue over 2026-29, close to the self-imposed 5% target, but well above the KS recommended 2%. Together with prudent budgeting and cost management, this will help to mitigate operating expenditure pressures.

Solid liquidity position supports the county’s debt profile. Akershus benefits from ample liquidity (NOK 2.7bn as of August 2025, more than 20% of operating revenue) and a demonstrated ability to flexibly re-budget investments, which helps to balance financial expenses and manage refinancing risks. The county’s weighted average interest rate on direct debt (including bond and certificate loans) is relatively high at 4.23% as of August 2025, marginally higher than the 4.15% reported as of end-2024. In addition, the proportion of debt with fixed interest rate remains moderate at 36% as of August 2025 – increased slightly from 31% in December last year – while 69% of debt on floating interest rate. The average interest rate fixation period remained around 2.2 years as of August, within the 0.5–3-year regulatory range, helping contain exposure to rate increases.

Scope projects that interest payments will remain stable at around 2% of operating revenues, even as the debt burden-to-gross operating revenue rises from 41% to 65% by 2029, although remaining well below the county’s 80% self-imposed limit. This will be driven by the county’s ambitious investment plan, focused mainly on education and transport. Still, the debt level will remain moderate compared to national peers. The 2026-29 financial plan proposes the allocation of NOK 1.07bn from the operating budget to finance investments, including expected annual NOK 250m dividends from Akershus Energi AS. In addition, unrestricted investment funds remain available for NOK 115.4m remain available for the financial plan period. These measures are expected to contribute to containing borrowing needs and balance financial expenses.

Favourable economic prospects. Akershus is the most populous county in Norway, with 740,680 inhabitants as of January 2025 (about 13% of Norway’s population). The county has experienced significant population growth in the past two decades, with an increase of 38.2% between 2005 and 2025, above the national growth rate of 21.5%, primarily driven by domestic migration. This trend is expected to continue, with Statistics Norway projecting a further increase in population by 8.9% by 2035. Akershus benefits from its deep integration with Oslo’s labour market, with the two counties jointly accounting for around 840,000 jobs—roughly one-third of total employment in Norway. Strong regional demand and rising applications for upper-secondary education further underscore the area’s economic dynamism and long-term labour-force attractiveness.

Akershus' population is relatively young, with a growing number of school-age children, high levels of education, and better or aligned with the national average living conditions metrics. The unemployment rate is approximately 2.5% as of September 2025, a figure that reflects the county's robust and diversified business sector, which provides employment opportunities for individuals at all educational levels.

Low-risk and well-controlled exposure to contingent liabilities. All outstanding guarantees at end-2024 were tied to Vegfinans Viken AS, one of the financing arms of the regional toll road operator. Despite significant guarantee volumes, Vegfinans’ low-risk business model ensures a minimal probability of guarantee activation. Additionally, pension-related liabilities are well-covered, with pension funds accounting for more than 100% of obligations at end-2024, reducing long-term financial strain.

Credit challenges for Akershus relate to limited flexibility in revenue and expenditure.

Akershus' budgetary flexibility is limited on both the revenue and expenditure sides. As in all Norwegian counties, free revenues from grants and taxes make up around 74% of operating income, leaving limited scope to increase revenues autonomously. Expenditures are similarly constrained with approximately 32% of operating revenue share allocated to personnel costs (excl. depreciation) and a substantial portion dedicated to social welfare, particularly education. However, the presence of dividend income and unrestricted reserve funds helps to mitigate the rigidity in the budget structure. Looking ahead, Scope expects budgetary flexibility to remain broadly unchanged, with reserves continuing to play a stabilising role amid moderate revenue volatility and rising spending pressures.

Rating-change drivers

The Stable Outlook reflects Scope’s view that risks to the ratings are balanced over the coming 12 to 18 months.

Downside scenarios for the ratings and Outlooks are (individually or collectively):

1. The Kingdom of Norway’s ratings/Outlooks were downgraded.
    
2. Reforms to the institutional framework materially weakened regions’ integration in institutional arrangements.
    
3. Akershus’ individual credit profile weakened significantly.

Qualitative Scorecards (QS1, QS2)

Scope’s institutional framework assessment determines the intergovernmental integration between sub-sovereigns and their rating anchor, which is the sovereign or a higher-tier government. To perform this assessment, Scope applies the Institutional Framework scorecard (QS1), centred on six analytical components: i) exceptional support and bailout practices; ii) systemic budgetary support and fiscal equalisation; iii) funding practices; iv) fiscal rules and oversight; v) revenue and spending powers; and vi) political coherence and multilevel governance.

Scope considers the institutional framework under which the Norwegian counties operate to display ‘strong’ integration for exceptional support and bailout practices, funding practices, fiscal rules and oversight, and political coherence and multilevel governance. The system displays ‘full’ integration for systemic budgetary support and fiscal equalisation, and revenue and spending powers. Consequently, Scope's assessment of the institutional framework establishes an indicative minimum rating of ‘aa’ for Norwegian counties.

Furthermore, Scope assesses the individual credit profile based on quantitative and qualitative analysis of four risk categories: i) debt and liquidity; ii) budget; iii) economy; and iv) ESG.

The outcome of these assessments, as reflected in the application of the Individual Credit Profile scorecard (QS2), is an individual credit profile score for Akershus of 75 out of 100.

The mapping of this score to the range defined by the Institutional Framework assessment results in an indicative rating of ‘aaa’ for Akershus.

The review of potential exceptional circumstances that cannot be captured by the Institutional Framework and Individual Credit Profile scorecards did not lead to further adjustments to Akershus’ indicative rating.

As such, the final rating corresponds to the indicative rating of AAA.

Environment, social and governance (ESG) factors

ESG factors material to Akershus’ credit quality are captured by Scope’s rating approach through several analytical areas.

Scope’s assessment of Norway’s sovereign credit quality includes an appraisal of ESG risks as detailed in Scope’s Sovereign Rating Methodology.

Governance considerations are material to Akershus’ rating and are included in Scope’s institutional framework assessment and its assessment of the county’s individual credit profile. These assessments highlight the robust quality of governance alongside the administration’s practices of sound liquidity and prudent budgetary planning.

The institutional framework assessment captures governance factors under fiscal rules and oversight, assessed as ‘strong integration’ for the Norwegian counties reflecting the financial rules mandated by the Local Government Act and close monitoring of finances. Additionally, governance factors are captured by political coherence and multilevel governance assessed as ‘strong’ integration for the Norwegian counties. This reflects extensive inter-regional cooperation that fosters policy coordination and a balanced, stable government structure.

The individual credit profile captures governance factors under the ESG ‘Governance and transparency’ component, which is assessed as ‘Stronger’. This assessment reflects transparent policymaking, a stable and predictable political environment, a forward-looking financial, clearly defined planning and management that tracks self-imposed fiscal targets.

Social considerations are reflected in Scope’s assessment under the ESG ‘Social factors’ component. Demographics, a main source of risk across many regions in Europe, are comparatively less of a concern for Norwegian counties as population trends and age structure are broadly considered within the equalisation system, although not all impacts in the developments in the age groups of the 16–19-year-olds and elderly people are buffered by equalisation. Akershus benefits from strong population growth, a highly educated workforce, and a dynamic labour market closely integrated with the Oslo region. These structural strengths support labour demand across a broad range of industries. This is reflected in Scope’s ‘Stronger’ assessment of the ESG ‘Social factors’ component.

Environmental factors are reflected in Scope’s assessment under the ESG ‘Environmental factors’ component, which is assessed at ‘Stronger’. This reflects Akershus’ relatively low physical climate risk exposure, advanced climate-adaptation planning and a more proactive approach to transition policies. Akershus has established ambitious goals in its climate budget, with a target of reducing greenhouse gas emissions by 80% by 2030 compared to 2016 levels. The county's robust adaptive capacity is evident in its numerous initiatives to reduce direct emissions from its operations, including the objective of achieving emission-free public transportation by 2030 Akershus is also implementing measures to support indirect emission reductions and advance circular-economy initiatives, in line with national objectives for a low-emission society by 2050 and to gradually reduce its own climate footprint. In addition, the county allocates regular resources to the Climate and Environmental Fund (NOK 7.6m as of end 2024) and the Oslofjord Fund (NOK 8.2m as of end 2024). Akershus is actively addressing national and regional climate and environmental challenges, supporting measures and projects related to agriculture, water management, education, R&D, and innovation, among others.

Rating committee
The main points discussed by the rating committee were: i) institutional framework for Norwegian counties, ii) Akershus’ individual credit profile including debt, budget, economy and ESG components; and iii) peer comparison.

Methodology
The methodology used for these Credit Ratings and Outlooks, (Sub-Sovereign Rating Methodology, 12 September 2025), is 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 and the Rated Entity.
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 Outlooks and the principal grounds on which the Credit Ratings and Outlooks are based. Following that review, the Credit Ratings and Outlooks were not amended before being issued.

Regulatory disclosures
These Credit Ratings and Outlooks are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and Outlooks are UK-endorsed.
Lead analyst: Alessandra Poli, Analyst
Person responsible for approval of the Credit Ratings: Jakob Suwalski, Executive Director
The Credit Ratings and Outlooks were first released by Scope Ratings on 10 January 2025.

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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