Moody's rates Oman Power and Water 'A2'

DUBAI — Moody's Investors Service has assigned long term local and foreign currency issuer ratings of A2 to Oman Power & Water Procurement Company S.A.O.C. (OPWP). The outlook is stable. This is the first time that Moody's has assigned ratings to OPWP.

By A Staff Reporter

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Published: Sat 27 Oct 2007, 8:43 AM

Last updated: Sat 4 Apr 2015, 11:30 PM

OPWP is the fully regulated, wholly government-owned sole bulk supplier of electricity and related water in the Sultanate of Oman. Consequently, ratings reflect the company's mandate, underpinned by the stability of a cost-plus framework which eliminates any commercial risk under normal circumstances by allowing full recognition of procurement costs.

Furthermore, the applicable Sector Law provides OPWP with a clearly defined and restricted remit.

"OPWP buys electricity and related water in bulk from licensed generation and desalination companies under long term contracts and sells this on to licensed electricity suppliers and water authorities under cost-plus tariffs", says Dubai/DIFC based Philipp Lotter, a Senior Credit Officer

at Moody's and lead analyst for OPWP. "Its mandate is clearly defined and limited to its regulatory obligations, and any market or counterparty

risk is minimal, thus underpinning its very low-risk business", Lotter adds.

Moody's regards OPWP as a central component of Oman's electricity and water sector, which over recent years has undergone significant restructuring.

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