Rating Release
Agusto & Co. hereby affirms the “A+” (long-term) and “A1” (short-term) ratings assigned to Paras Energy and Natural Resources Development Limited, with a stable outlook.
The rating expires on 30 June 2027.
Agusto & Co. hereby affirms the “A+” (long-term) and “A1” (short-term) ratings assigned to Paras Energy and Natural Resources Development Limited (“Paras Energy”, “PENRDL” or “the Company”). The affirmation reflects the Company’s resilient earnings and operating cash flow generation despite rising gas cost pressures, as well as its established electricity supply relationships with domestic and international off-takers. This is in addition to Paras Energy’s adequate working capital position, low leverage and sizeable equity base, which provide financial flexibility and capacity to meet its obligations. The ratings also recognise the Company’s ongoing investments in renewable energy and power generation, including its 25 megawatts (MW) renewable energy portfolio and proposed 200MW solar project in Niger State, which are expected to diversify revenue and support future earnings growth. Nevertheless, the ratings are constrained by ongoing business disruptions arising from prolonged unavailability of the transmission lines, gas supply risks and execution risks associated with the Company’s generation and renewable energy expansion plans. The ratings are further constrained by a corporate governance framework that requires strengthening.
Paras Energy and Natural Resources Development Limited is a licensed power generation company authorised by the Nigerian Electricity Regulatory Commission (NERC) to operate up to 170MW of on grid capacity. Incorporated in 2002, the Company commenced operations in 2016 with 48.7MW and has since expanded its installed capacity to 110MW. PENRDL supplies electricity to power utilities in Benin and Togo, as well as industrial customers in Nigeria, including PZ Cussons Nigeria PLC and FrieslandCampina WAMCO Nigeria PLC. The Company is also expanding into renewable energy and solar EPC activities through a 25MW portfolio comprising a 23MW project for Abuja Steel Mills Limited (a sister company) and an additional 2MW across Agbara, Kano and Lekki. PENRDL is a member of African Industries Group (“AIG” or “the Group”).