We expect energy costs to stay high in 2022 because of advance energy purchases in 2021 at higher prices. This, along with weaker economic conditions, will delay recovery of Brazilian hydropower generator CESP-Companhia Energetica de Sao Paulo's credit metrics. We believe CESP will maintain funds from operations (FFO) to debt between 20%-30% and FFO cash interest coverage below 6.0x in the next couple of years. As a result, on May 24, 2022, S&P Global Ratings revised downward CESP's stand-alone credit profile (SACP) to 'bb' from 'bb+'. At the same time, we affirmed the 'BB-' global scale and 'brAAA' national scale issuer credit ratings on the company. The stable outlook on CESP reflects that on Brazil, given that the sovereign rating
