DEWA rated investment grade by S&P

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Dubai Electricity and Water Authority (DEWA), the monopoly state utility provider is rated as investment grade by the Standard & Poor?s, the ratings agency.

“The ratings reflect our opinion that there is a very high likelihood that the Dubai government would provide timely and sufficient extraordinary support for DEWA in the event of financial stress,” S&P said.

S&P has awarded DEWA BBB, the lowest investment grade on the agency?s scale, though a stable outlook on the potential for high government support from the government of Dubai, if the company faces financial crisis.

DEWA?s chief executive has commented in March, the company plans annual capital expenditures of around $1bn over the next three years and expects Dubai’s energy use to increase by between six and seven percent by this year.

In March, Fitch Ratings withdrew its ratings of DEWA, citing a lack of information to assess Dubai’s creditworthiness.

DEWA is considered one of the strongest assets of the Dubai Government.

Sources: REUTERS; Arabian Business; CNBC

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