The international rating agency S&P Global Ratings has revealed that AzerEnergy's annual capital expenditure in 2024-2025 is expected to be around 340-350 million manats ($200-210 million), compared to 696 million manats (over $409 million) in 2023. This reduction in spending is projected to result in a positive annual free operating cash flow of approximately 110 million manats.
This is while S&P forecasts a moderate increase in AzerEnergy's net debt to 1.2-1.3 billion manats in 2024-2025, as the company plans to issue new debt obligations to support its capital investment plan. As a result, the ratio of funds from operations (FFO) to debt is expected to exceed 30% over the next two years. S&P notes that capital investments may further increase if the government directs AzerEnergy to continue investing.
AzerEnergy is set to commission several generating assets by the end of 2024, including nine hydroelectric power plants with a total installed capacity of around 80 megawatts. In April 2023, the company secured a six-year loan of $180 million from local Kapital Bank to support its investment plan, particularly for a new 1,280-megawatt combined cycle gas turbine. The construction of this plant is reportedly on schedule and is expected to be commissioned by the end of 2024.