Rating Release
Agusto & Co. hereby upgrades the rating assigned to Paras Energy and Natural Resources Development Limited to A-
The rating expires on 30 June 2025.
Agusto & Co. hereby upgrades the rating assigned to Paras Energy and Natural Resources Development Limited (“Paras Energy” or “the Company” or “PENRDL”) to A- on account of the better working capital position compared to the prior year. The rating also reflects the Company’s good financial condition characterised by healthy profitability and cash flow positions, low leverage and a stable and experienced management team. In addition, the rating takes into cognizance Paras Energy’s resilience to economic shocks upheld by its export-centred business model which provides significant upsides in periods of foreign currency volatilities, as seen in the review year. However, the rating is tempered by the Company’s concentrated customer base.
Paras Energy is the power generation arm of the African Industries Group, a conglomerate with over five decades of operations spanning various sectors in Nigeria including mining, steel manufacturing, glass manufacturing, power generation from gas and solar, decoratives, agriculture, logistics, chemicals, packaging, and research and development. In the review year, the Company was licensed by the National Electricity Regulatory Commission (NERC) to produce 96 megawatts (MW) of grid-connected electricity. However, in May 2024, NERC increased the Company’s on-grid electricity generation license to 170MW. In FY 2023, Paras Energy’s output was mainly for exports and sold to a singular customer – Société Béninoise de Production d’Électricité (SBPE), a state-owned company in the Republic of Benin. In addition, the Company signed two corporate clients in Nigeria in November 2023 to supply 2MW of electricity and an export off-taker in the Republic of Togo in August 2024 to supply up to 40MW. Looking ahead, the Company plans to diversify its customer base by targeting more corporate clients in Nigeria under the captive power model and expanding electricity supply in the Republic of Togo.