Rat­ing agency Cari­CRIS has reaf­firmed ‘good’ cred­it­wor­thi­ness rat­ings for Ni­Quan En­er­gy Trinidad Lim­it­ed (NETL).

Cari­CRIS ex­plained that the sta­ble out­look is based on the or­ga­ni­za­tion’s ex­pec­ta­tion that, “bar­ring any oth­er un­fore­seen cir­cum­stances or events, once com­mer­cial op­er­a­tions suc­cess­ful­ly be­gins with­in the sec­ond quar­ter of 2022, Cari­CRIS ex­pects the NETL to com­fort­ably meet all its in­ter­est and prin­ci­pal re­pay­ments.”

Cari­CRIS added that the sta­ble out­look is al­so sup­port­ed by the strong ac­tions tak­en by the com­pa­ny fol­low­ing the April 2021 ex­plo­sion to pre­vent re­cur­rence, in­clud­ing the com­mis­sion­ing of an in­de­pen­dent Root Cause Analy­sis (RCA) re­port, and the suc­cess­ful im­ple­men­ta­tion to date by the com­pa­ny of ap­prox­i­mate­ly 97 per cent of the rec­om­men­da­tions from the RCA.

“How­ev­er, notwith­stand­ing our rat­ings re-af­fir­ma­tion and sta­ble out­look, giv­en the sub­stan­tial de­lays to the project al­ready ex­pe­ri­enced, should NETL not achieve a suc­cess­ful Lender’s Re­li­a­bil­i­ty Test cer­ti­fi­ca­tion (LRT)1 by June 2022, a pre-req­ui­site for re­fi­nanc­ing and full com­mer­cial op­er­a­tions, we will low­er the com­pa­ny’s rat­ings,” Cari­CRIS ad­vised.

It added that the rat­ings of NETL are un­der­pinned by low con­struc­tion/com­ple­tion risk. Cari­CRIS said the de­lays in achiev­ing com­mer­cial op­er­a­tions are some­what tem­pered by a valid Fixed Price Lump Sum Turnkey (LSTK) con­tract with plant per­for­mance guar­an­tees and the use of rep­utable and com­mer­cial­ly-test­ed tech­nol­o­gy to max­i­mize the like­li­hood of suc­cess­ful op­er­a­tion.

The rat­ings are fur­ther sup­port­ed by legal­ly bind­ing sup­ply and off­take agree­ments, un­der­pinned by the crit­i­cal im­por­tance of the end prod­ucts, as well as a chang­ing reg­u­la­to­ry and macro­eco­nom­ic en­vi­ron­ment which sup­port favourable de­mand con­di­tions, Cari­CRIS said.

“A good pro­ject­ed fi­nan­cial per­for­mance with ad­e­quate debt ser­vic­ing ca­pac­i­ty based on its op­er­a­tional ef­fi­cien­cy guar­an­tee out­put lev­el, to­geth­er with the Own­er-Con­trolled In­sur­ance Pro­gramme (OCIP) in­sur­ance wrap poli­cies which serves as an ad­di­tion­al lay­er of pro­tec­tion to the lenders, fur­ther sup­port the rat­ings,” Cari­CRIS added.

It al­so not­ed that the com­pa­ny con­tin­ues to be run by a knowl­edge­able and ex­pe­ri­enced board and ex­ec­u­tive man­age­ment team.

“These rat­ing strengths are tem­pered by NETL’s vul­ner­a­bil­i­ty to the cycli­cal­i­ty of glob­al en­er­gy prices,”Cari­CRIS added.