Last week, Fitch Ratings updated its assessment of two Romanian utilities companies, Electrica and Transgaz, maintaining their investment-grade profiles while signaling improving credit dynamics for the latter.
Starting with Electrica, Fitch affirmed the Company’s Long-Term Issuer Default Rating (IDR) at ‘BBB-’ with a Stable Outlook, while also assigning a final ‘BBB-’ rating to its EUR 500m 4.375% senior unsecured green notes due 2030.
The Company’s credit trajectory already improved earlier in March 2025, when Fitch revised Electrica’s outlook from Negative to Stable while reaffirming the ‘BBB-’ rating. The revision reflected a strengthening funding structure, with a higher share of long-term financing compared to previous years when short-term borrowing dominated. Fitch also expects leverage metrics to remain comfortably within rating sensitivities through the 2025–2029 period, supported by stable EBITDA generation and working-capital inflows related to government subsidy settlements under the electricity supply compensation scheme. Importantly, the outlook revision also effectively decoupled Electrica’s rating from Romania’s sovereign trajectory, marking a notable shift in the agency’s credit assessment.
This improving credit profile was further reinforced in July 2025, when Electrica executed Romania’s inaugural corporate green bond issuance. The EUR 500m bonds are registered, non-convertible, senior unsecured euro-denominated notes with a nominal value of EUR 1,000 each, carrying a 4.375% annual coupon and maturing on 14 July 2030. Fitch assigned the bonds a final ‘BBB-’ rating, in line with the expected rating announced on 2 July 2025.
Investor demand for the issuance was exceptionally strong, exceeding supply by nearly 12 times, with 155 institutional investors from 31 countries participating. The proceeds are earmarked for renewable energy and electricity storage infrastructure under Electrica’s Green Finance Framework, supporting the Company’s target of reaching 1,000 MW of installed renewable capacity by 2030.
Operational performance in 2025 further supported the Company’s credit profile. Top-line was primarily affected by the lifting of the capping for electricity prices, with the supply segment increasing by 36.5%. Electrica reported a record net profit of RON 1.2bn, representing a 159% increase YoY (supported by net finance income from interest and dividends), while EBITDA reached RON 2.4bn, up 64% compared to 2024. The Regulated Asset Base (RAB) expanded to over RON 8.6bn, and the Company achieved a commissioning rate of 115% of its investment program target.
Around 80% of EBITDA continues to originate from regulated electricity distribution activities, providing stable and predictable cash flows. Fitch expects additional EBITDA contributions from the generation segment beginning in 2027, driven by Electrica’s RON 1.6bn renewable investment program through 2029. Although the bonds are issued at the holding-company level and are not guaranteed by operating subsidiaries, Fitch considers the resulting structural subordination risk manageable. The agency expects Electrica’s FFO net leverage to remain broadly within the 3x–4x sensitivity range, supported by stronger EBITDA generation and a gradual unwinding of working-capital pressures related to the government support scheme.
For Transgaz, Fitch’s assessment carries a more constructive signal. In June 2025, the agency revised the Company’s outlook from Stable to Positive while affirming the ‘BBB-’ IDR, effectively putting a potential one-notch upgrade to ‘BBB’ into view.
The outlook revision reflects net debt remaining below Fitch’s positive sensitivity threshold, improved EBITDA visibility as the Company transitions towards a purely regulated transmission system operator (TSO) model, and strengthened liquidity. It also incorporates progress on the Company’s largest investment project – the Black Sea- Podișor pipeline – which was previously expected to be recognized within the (RAB) in October 2025, significantly expanding both RAB and EBITDA.
The 307 km Tuzla–Podișor pipeline is a key strategic project connecting Romania’s national gas transmission system and the BRUA (Bulgaria-Romania-Hungary-Austria) corridor to anticipated Black Sea production from the Neptun Deep gas field, with gas flows expected to begin in 2027. Construction was awarded to Turkey-based Kalyon İnşaat in 2023, while Transgaz, OMV Petrom and Romgaz have already booked capacity on the pipeline. Once the asset is formally transferred to Transgaz and incorporated into the regulated asset base, it should structurally expand the Company’s earnings base and further strengthen its leverage profile.
Financial performance has also remained strong. In 2025, Transgaz reported a net profit of RON 860m, up 117% YoY, with EBITDA and top-line increasing by 50% and 26%, respectively. The across the board positive results are mostly tied to stronger transmission revenues due to higher regulated tariffs, while the bottom-line is further supported by positive financial results.
That said, the Positive Outlook is not without risks. Fitch highlights that debt-funded investment in additional export capacity to Hungary above the currently assumed 3 bcm/year could push leverage higher than expected, representing the primary downside risk to a rating upgrade.
Overall, Fitch’s latest actions reaffirm the resilient credit fundamentals of Romania’s regulated energy infrastructure sector, supported by predictable cash flows and a relatively stable regulatory framework. While Electrica’s rating action largely confirms the stability of its financial profile and funding structure, Transgaz’s Positive Outlook signals a potential upgrade path, contingent on leverage remaining contained and free cash flow normalizing once the current investment cycle moderates.