Global rating agency Standard and Poor’s (S&P) promoted its long-term issuer credit rating on India-based Greenko Energy Holdings from “B+” to “BB-“, improving its business position and stable outlook. Greenko Energy Holdings’ stabilising working performance with greater resource variety and handy execution risk for pumped storage projects strengthened its business position, the rating agency reported.

The India-based renewable energy company surfaces eminent leverage amid high capital spending. But, the strong equity commitment from sponsors for growth capital, leading improvement in its receivables position and supporting financial ratios next 12-18 months.

The company’s distinguished business position with momentous resource diversity, stabilising working performance, and a strategy of fee-based pumped storage solutions collectively results in more stable and resilient cash flows. Stabilising wind performance and an increasingly diversified portfolio will improve Greenko’s overall portfolio recital. The agency supposes the above P90 performance of 873 megawatts (MW) from its Orix Corp wind assets and salvage in industry-wide wind performance in the fiscal year ending 31st March 2023.

Referring to the receivables, S&P said that Greenko’s receivables outlook would temporarily stabilise over the next 12 months with the overdue collection. The Government’s Late Payment Surcharge scheme would temporarily relieve Greenko to reduce working capital drag. “We have forecasted neutral working capital movement in 2023 fiscal and working capital outflow of $80 million in 2024 fiscal.

However, the agency points out that the supplement scheme doesn’t resolve fully as the structural faintness of the state distribution companies and Greenko will remain uncovered, associated with the risk of weak counterparties and further payment suspensions.