“At end-2015, Azerenerji's debt increased to AZN2.4 billion from AZN1.5 billion, mainly on the back of local currency weakening. Following the manat devaluation in 2015, the state approved the provision of an equity injection to Azerenerji to partially cover its scheduled foreign debt repayments, as the majority of debt is guaranteed by the state”, the agency said.
Azerenerji's standalone profile has weakened, due to its worsening financial performance and weak liquidity. Deteriorating financial performance was mainly driven by the manat devaluation, which resulted in a debt increase, and by the continued imbalanced tariff-setting mechanism. At end-November 2016 gas prices were increased further by 50% and electricity prices were increased by about 5% in July 2016 and additionally by 33% at end-Nov16. Azerenerji expects electricity and gas tariffs to remain flat in the near term.
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