Fitch Ratings assesses the Partnership Fund

Fitch Ratings assesses the Partnership Fund

International rating agency Fitch ratings retained Partnership Fund’s ‘BB’ with stable forecast. Rating of the Fund is equalized with the rating of the state.

The rating agency claims that the fund owned by the state plays a significant role for the economic policy and development plan of the state. In its press release, the Agency states that the mandate of the fund is to support investments in the country and conduct surveillance over state infrastructural corporations.

The Partnership Fund holds the shares of the Georgian Railway, Georgian Oil and Gas Corporation, Georgian State Electrosystem, Electricity System Commercial Operator.

Fitch regards the Partnership Fund as a strategically important body and states that the government uses it as a financing mechanism, which is supposed to stimulate investments in the economy.

“We believe that the Fund’s strategic role with regard to facilitation of investments in the main driving sectors of the economy, particularly energy and infrastructure will not change”, – state in Fitch.

Remember that the Partnership Fund has been named by IMF as one sources for fiscal risks. As it was stated in IMF report, the program of IMF confines new loans of the Partnership Fund and sets certain limits for its cash deficit. The agreements on guaranteed energy procurement (PPA) were also named by the International Monetary Fund among risks.

Fitch states that in 2018-2020, there will be a “peak of the loan repayment period”.  “This will require the inflow of dividends, which might be difficult to achieve”, they say in Fitch and name low profitability of the Fund’s affiliated companies as the reason for this. 

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