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Fitch upgrades RWE rating to BBB+

By: Tom Russell 25/03/2021 RWE

Corporate General

Fitch Ratings has upgraded RWE’s long-term rating by one notch to BBB+, with a stable outlook. The short-term rating was raised from F2 to F1 and the rating relevant to subordinated hybrid bonds was raised from BB+ to BBB-.

Fitch acknowledged in particular RWE’s focus on expanding renewable energies. Thanks to long-term contracts, the growth expected in this area will go hand in hand with stable revenues. This raises RWE’s creditworthiness from the point of view of the rating specialists.

The rating agency considers the rigorous and reliable exit from coal as being a further key element in RWE’s strategic realignment.

“The fact that Fitch is upgrading our rating is further proof that RWE’s strategic realignment as one of the global leaders in renewables is being acknowledged by the capital market. We are investing billions of euros in the value-driven expansion of our portfolio of wind and solar power plants, and at the same time we are exiting reliably and responsibly from nuclear energy and coal. We have a clear goal here: to be carbon-neutral by 2040. Financially too, we are in an excellent position – with and outstanding business performance in 2020, a strong equity base and a low leverage factor," said Markus Krebber, CFO of RWE AG.

RWE announced yesterday (24 March 2021) that it had taken the Financial Investment Decision on its 1.4 GW Sofia offshore wind project. The 100% RWE-owned project represents a total investment of approximately £3 billion.

The company is now poised to forge ahead with the construction of Sofia, with onshore enabling works due to start this spring and offshore construction in 2023. Final project completion is expected by Q4 2026. RWE was awarded a Contract for Difference (CfD) for Sofia in 2019, achieving a strike price of £39.65 per megawatt hour (in 2012 prices).

RWE’s UK offshore portfolio continues to expand in the UK. In addition to Sofia, the construction of RWE’s 857 MW Triton Knoll offshore wind farm (RWE’s pro rata share: 506 MW) is progressing. RWE is also progressing four extension projects in the UK, with a combined potential installed capacity of around 2.6 GW (RWE’s pro rata share: 1.3 GW), and which are already engaging in public consultation. Meanwhile, the company recently issued bid for two new adjacent offshore sites – also on Dogger Bank – with a potential total installed capacity of 3 GW in The Crown Estate’s Offshore Wind Round 4 Leasing auction.

Between 2020 and 2022, RWE plans to invest more than €5 billion net in its renewables portfolio. By the end of 2022, RWE aims to expand its portfolio of wind and solar power plants from over 9 GW to more than 13 GW. The company is currently building new plants with an installed capacity of 3 GW. The project pipeline comprises development projects totalling about 34 GW. The company is participating in some 30 hydrogen projects.

For more information on offshore wind farms worldwide, click here.

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Fitch upgrades RWE rating to BBB+

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