Indian and Indonesian utilities will likely lead revenue growth amidst their attempt meet electrification goals.
Indian and Indonesian utilities are likely to witness high single-digit to mid-teens growth in revenues driven by their respective generation and transmission capacity growth to meet electrification goals and plug deficits, according to S&P Global Ratings’ 2019 industry top trends report.
However, growth in renewable energy is expected to slow down from higher base, although it is still likely to remain robust at above 20%.
Meanwhile, moderate revenue growth is reportedly broadly in line with the gross domestic product (GDP) growth of 2-4% in Malaysia and Singapore, Abhishek Dangra, one of the report’s authors, said.
“We expect inorganic growth from acquisitions of renewables and distressed power plants in India, independent power producers in Thailand, and overseas acquisitions for Malaysian and Singaporean utilities,” he added. “The impact of acquisitions on leverage metrics will depend on the funding mix and target profile.”
According to the report, planned commissioning of new capacities coming on-stream in 2019 and 2020 may result in possible deleveraging post 2020.
“Whilst growing economies will continue to drive power investments, we expect the pace of capital expenditure (capex) to slow down from 2020,” Dangra noted. “Singapore, Malaysia, Thailand and Philippines could incur moderate capex whilst maintaining significantly lower leverage than peers in India and Indonesia.”
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