HONG KONG – Fitch Ratings has affirmed Yunnan Energy Investment Group Co., Ltd.'s (YEIG) Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-', maintaining a Stable Outlook. The affirmation underscores YEIG's robust financial standing and its pivotal role as a government-related entity (GRE) within Yunnan Province, China, particularly its strategic alignment with provincial energy and industrial development policies. This rating reflects the company's strong operational and financial links to the Yunnan provincial government, which provides substantial support and oversight.

YEIG's business profile is characterized by a diversified portfolio that directly supports Yunnan's economic and energy objectives. The group is a significant investor in the province's burgeoning renewable energy sector, with substantial assets in hydropower, solar, and wind power generation. This focus on clean energy aligns with China's broader decarbonization goals and Yunnan's specific mandate to leverage its abundant renewable resources, particularly its vast hydropower potential. Beyond renewables, YEIG plays a crucial role in the province's energy infrastructure through its natural gas distribution networks, ensuring stable energy supply to industrial and residential consumers. The company also maintains a strategic presence in salt production, an essential industry for the region.

The 'BBB-' rating and Stable Outlook are indicative of Fitch's expectation that YEIG will continue to receive strong government support, given its strategic importance to Yunnan Province. This support is crucial for the company's ongoing capital expenditure programs, particularly in expanding its renewable energy capacity and upgrading its energy distribution infrastructure. YEIG's financial performance benefits from stable revenue streams from its diversified operations and its ability to secure favorable financing terms due to its GRE status. The company's disciplined investment strategy, coupled with its adherence to provincial directives, mitigates risks associated with large-scale infrastructure development.

Yunnan Province is a key player in China's energy landscape, known for its significant hydropower resources and increasing integration of other renewable sources. YEIG's investments are instrumental in optimizing the provincial energy mix, enhancing grid stability, and promoting sustainable industrial growth. The company's commitment to developing renewable power not only contributes to environmental targets but also positions Yunnan as a leader in clean energy generation within China. The affirmation by Fitch provides a strong signal of confidence to investors and stakeholders regarding YEIG's creditworthiness and its integral role in the province's long-term energy strategy.