A credit rating is an expression of a company's ability to meet its financial commitments timeously and attract investments.

Fitch Ratings on Thursday assigned NamPower ratings of senior unsecured foreign currency 'BBB?' (BBB minus) and short-term 'F3'.

It is also assigned national ratings of senior unsecured 'BBB+(zaf)' and short-term 'F2(zaf)'.

According to a statement released by Fitch Ratings, all the rating outlooks are stable.

"The ratings reflect NamPower's leading position in the Namibian electricity industry, where it enjoys a monopoly over generation and transmission activities, as well as its long operational track record since it started as a commercial entity in 1964, and an experienced management team.

While benefiting from vertical integration, NamPower lacks the scale of many international peers, such as South African Eskom," said the statement.

The national power utility embarked on the credit rating to ascertain its creditworthiness in the market as part and parcel of NamPower's long-term funding strategy for among others, the much-needed generation and transmission projects which amount to about N$6,7 billion during the next four years.

The two main investments being considered are the Caprivi Link, a transmission line linking Zambia and Namibia, and the Kudu Project, which involves the construction of a new 800-Megawatt power station using gas from the newly developed Kudu offshore gas field.

Currently NamPower imports about 50 per cent of its electricity, mainly from South Africa's Eskom.

"This remarkable performance is a result of prudent financial management, operational efficiency and employee commitment as reflected in the Group's overall financial health of a gross revenue of N$1,01 billion and net income of N$89 million before tax during the 2004/05 financial year.

NamPower's asset base of N$6,7 billion to date represents an extraordinary strong platform upon which to build for the future," said NamPower spokesman, Chris Ndivanga.

Early last week, Namibia became the third country in sub-Saharan Africa to be assigned by Fitch Ratings a long-term foreign currency rating of 'BBB-', and a long-term local currency rating of 'BBB'; both with a stable outlook as a result of a stable policy environment and sound macro-economic fundamentals.

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