S&P affirms Eesti Energia

Standard & Poor's said it affirmed its A- long-term corporate credit rating on Estonia-based vertically integrated electricity utility Eesti Energia AS following a review. The outlook remains negative.

Following a change of minister, the Estonian government has abandoned the plans announced in spring 2004 to restructure and split up Eesti Energia and to accelerate market opening. The removal of this risk is a positive for the company. Nevertheless, these initiatives suggest that government support is weaker than previously assumed, the agency said.

S&P said the ratings on Eesti Energia reflect the company's average business profile and the credit strengths of its transmission and distribution monopolies, and its dominant position in electricity generation and supply in Estonia. The rating is underpinned by the supportive regulation and implicit support from the company's 100% owner, the Republic of Estonia (A-/positive/A-2).

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