...Weakening State Support and Regulatory Uncertainties Fitch expects the regulatory risks in CIS countries to intensify against a backdrop of moderate economic growth. The regulators in Kazakhstan and Azerbaijan are still considering tariff determinations for 2016 and beyond for generation companies. This adds to uncertainty over companies' operations, and as a result, business and financial risks. What to Watch Kazakh Capacity Market Postponed: The initially planned implementation of capacity market was postponed from 2016 until 2019, which adds tariffs uncertainty for 2016 and afterwards, thus decreasing cash flow predictability. We expect generators' tariffs to continue reflecting fuel and other cost inflation and to cover large part of capex needs. Extensive Capex Needs: We view most of CIS utilities' capex programmes as significant and less flexible than those of Russian utilities, which will result in substantial negative free cash flow for most of them for the next three years. Weakening...
