EPM Maintains Investment-Grade Rating Following ‘CaribeMar’ Deal; Colombia Power Demand Dips on Coronavirus Crisis

Medellin-based electric power giant EPM announced March 24 that Wall Street bond rater Moody’s just decided to maintain EPM’s “Baa3” investment-grade bond rating following its winning bid for the “CaribeMar” utility in Colombia’s Caribbean region.

“After the analysis of non-recurring issues that the company has been going through — such as the [three-year start-up delay, to 2021] of the Hidroituango hydroelectric project since April 2018, and particularly considering the recent award of CaribeMar [auction] to EPM — the rating firm Moody’s Investors Service reaffirmed the ‘Baa3’ investment grade rating for international bond issues and EPM’s corporate debt,” EPM revealed.

“Moody’s mentions that with the acquisition of CaribeMar, EPM further consolidates its leadership in the energy business in Colombia, going from a market share of approximately 23% to 35%. This will expand the provision of the energy distribution service in the northern departments of Bolívar, Cesar, Córdoba and Sucre.

“The rating firm also highlights operational synergies given the new acquisition in a geographic area adjacent to existing operations that will be of benefit to the entire business group,” EPM added.

XM: Coronavirus Cuts Power Demand

Elsewhere on the electric-power front, Medellin-based national power-market operator XM announced March 24 that Colombian power demand has fallen about 12% because of personal and corporate cutbacks since the emergence of the Coronavirus crisis.

“The implementation of preventive measures aimed at reducing the spread of COVID-19 has impacted the demand for electrical energy in the country, which during the [past] weekend had a reduction of up to 12% daily, compared to equivalent days” of the prior weekend, according to XM.

“In countries with similar conditions of social distancing as a consequence of COVID-19, [power-demand] reductions have been from 7% to 33%,”  XM added, citing new statistics from the U.S.-based Electric Power Research Institute.

Commenting on this phenomenon, XM general manager María Nohemi Arboleda stated: “The invitation to Colombians is that we continue to make responsible use of resources, abiding by the indications of staying at home as defined by the national government and, above all, protecting people’s health.”