The regulatory landscape and tariff-setting methodology has recently become more beneficial for Kazakhstan's electricity transportation sector. In our view, this will help offset the pressure on the metrics of Kazakhstan Electricity Grid Operating Co. (JSC; KEGOC) arising from its significant capital expenditure (capex) program. We expect KEGOC's capex to increase to about Kazakh tenge (KZT) 200 billion in 2026-2027, compared with about KZT46 billion (on a reported basis, including intangibles) in 2024. We therefore project KEGOC's funds from operations (FFO) to debt to gradually decline to about 30% by 2027 and debt to EBITDA to increase to approximately 2.0x (compared with about 50% and 1.2x in 2024, respectively), which view as commensurate with the current rating. As a result, our
