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Rating action

Scope Ratings GmbH (Scope) has today affirmed the BBB-/Stable issuer rating on GS Inima Environment S.A.U. (GS Inima).

The rating is driven by GS Inima’s activities in the low-risk water concessions business, which provide stable and predictable cash flows and support a good financial risk profile. The rating is constrained by the company’s limited size, high exposure to emerging markets and concentrated concessions portfolio. Profitability is also expected to weaken in 2025-2026 due to losses and provisions related to construction delays at its main project, the Shuweihat 4 desalination plant.

In August 2025, Abu Dhabi National Energy Company PJSC (TAQA) agreed to acquire 100% of GS Inima for USD 1.2bn, with closing expected by end-Q2 2026¹. Scope expects the transaction, once completed, to support GS Inima’s financial flexibility and access to funding over time, including through potential equity support to meet project and corporate equity requirements, when necessary, while the issuer continues to operate as an independent platform.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: BBB- (unchanged). GS Inima’s business risk profile benefits from its low-risk water concession business, a market with high barriers to entry that provides strong cash generation and high profitability. The company focuses on long-term water concession contracts (average 25-year term), signed mostly with municipalities or government agencies and to a lesser extent with industrial customers. The company’s modest size, high exposure to emerging markets and concentrated concessions portfolio weigh on the assessment.

GS Inima is a global specialist in water concessions, a segment which offers stable and predictable cash flows over long periods and is resilient to economic cycles, with revenues largely indexed to inflation. Although the company is small in terms of revenues* (2024: EUR 389m; up 11% YoY) and reported EBITDA (2024: EUR 105m; up 4% YoY), its focus on water concessions provides it a distinct market position as concessionaires with long-term contracts typically benefit from monopoly-like structures in their service areas and regulated revenues. Scope expects reported revenues to temporarily increase to around EUR 550m in 2025, mainly driven by construction related to large desalination projects.

Geographical diversification remains weak. Although the company operates on four continents, around 40% of its 2024 revenue and about 72% of its backlog as of December 2025 are linked to Brazil. Other notable regions are Oman (about 14% of backlog), the United Arab Emirates (about 4%), Algeria (about 4%), Spain (about 3%), Mexico (about 2%) and Portugal (about 1%). As such, the concessions portfolio remains mainly exposed to markets with higher sovereign risk and, in some cases, less developed regulatory frameworks. The heavy reliance on Brazil is a particular credit weakness due to the elevated political and regulatory dependence this presents. However, the company’s long operating history in Brazil since 1995 and the stickiness of its long-term concession contracts, with limited customer switching, mitigate the demand risk and support recurring cash flows.

Profitability is historically strong, supported by inflation indexation mechanisms and protective contractual features such as energy pass-through and take-or-pay structures. Profitability will, however, weaken in 2025–2026 due to losses associated with construction delays at the group’s largest project, Shuweihat 4. GS Inima holds 40% in the project special purpose vehicle, while TAQA owns 60%. GS Inima is also exposed to the project’s construction risk as the EPC contract is fully subcontracted to one of its subsidiaries. The project is estimated to have a six-month delay, with completion now expected in early 2027. GS Inima booked provisions in 2025 based on conservative assumptions, yet the ultimate impact remains uncertain. Scope expects margins to recover from 2027 as major projects become operational and regulated concession earnings regain a higher share, with the EBITDA margin trending back towards around 25%.

Financial risk profile: BBB- (unchanged). The financial risk profile reflects GS Inima’s solid credit metrics, supported by resilient and predictable cash flow generation.

Cash generation is strong, driven by GS Inima’s business model with limited obsolescence risk over the next few years. Water concessions offer resilient cash flows as the business is largely insulated from macroeconomic conditions, particularly household demand, and a fixed tariff component ensures a minimum revenue floor. This resilience was also evident during exceptional events, for example, the Covid-19 crisis had a greater impact on other types of concessionaires such as transport infrastructure operators.

More than 70% of GS Inima’s financial debt consists of non-recourse, long-maturity project finance loans. Scope focuses on leverage on a recourse basis for the analysis but recognises the strategic importance of infrastructure projects and reflects this through a 25% consolidation of non-recourse debt and cash. Scope expects leverage (debt/EBITDA) to temporarily weaken to 2.9x in 2026, due to lower EBITDA and higher debt, before improving to around 2.1x in 2027 as major projects enter the operational phase.

GS Inima maintains a solid financial position, with most cash and cash equivalents held at concession project companies. These balances can generally be transferred to the holding company or country subsidiaries once obligations under project finance agreements are met.

Debt protection, as measured by EBITDA interest cover, declined to around 4.2x in 2024 and is expected to fall to around 3.9x in 2025 and 3.0x in 2026, before stabilising at around 2.9x in 2027. Despite this temporary weakening, debt protection continues to benefit from GS Inima’s largely protected business model with stable, predictable and inflation-linked revenues. Interest rate risk is partly mitigated by hedging and pre-hedging, with around 60% of debt either at a fixed rate or hedged as of year-end 2025.

Liquidity: adequate (unchanged). Liquidity is adequate, benefiting from unrestricted cash balances of EUR 135m and over EUR 110m of cash equivalents available as of end-2025. Scope applies a 75% haircut to the cash held in the concession companies to reflect the 25% non-recourse addition in the leverage calculation. Liquidity is further enhanced by EUR 41m of undrawn committed credit facilities. These resources are sufficient to cover around EUR 75m of maturities (including EUR 48m in non-recourse debt) over the next 12 months.

Supplementary rating drivers: credit-neutral (unchanged). Scope has made no rating adjustments related to peer group considerations, parent support, or governance and structure.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s view that GS Inima will maintain highly predictable cash flows from its long-term concessions, supported by robust remuneration mechanisms. Scope expects credit metrics to recover after weakening in 2025-2026 due to Shuweihat 4 construction delays and related provisions. Scope’s view is further supported by its expectation that growth targets will be met, reinforced by the pending TAQA acquisition, which should enhance financial flexibility, funding access and equity support to sustain disciplined leverage in line with its concession-based model.

The upside scenario for the rating and Outlook:

1. Greater diversification into more mature markets (unlikely), while credit metrics develop as expected by Scope

The downside scenarios for the rating and Outlook (individually):

1. Debt/EBITDA of above 2.5x
    
2. EBITDA interest cover of around 2x
    
3. Further exposure to execution risks relating to EPC activity on current and future projects unless actively mitigated
    
4. Deteriorating credit quality of the concession portfolio’s country exposures

Environmental, social and governance (ESG) factors

GS Inima is a key player in the circular economy due to its core business of water management across the value chain. The company’s applied technologies, such as reserve osmosis, will further enhance water management efficiency, key to maintaining its competitive position. From a social perspective, GS Inima provides the essential services of drinking water and desalination in countries exposed to water scarcity and infrastructure gaps.

All rating actions and rated entities

GS Inima Environment S.A.U.

Issuer rating: BBB-/Stable, affirmation

*All credit metrics refer to Scope-adjusted figures.

Rating driver references
1. TAQA press release 

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for this Credit Rating and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; Construction and Construction Materials Rating Methodology, 23 January 2026), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Rating: public domain, the Rated Entity and Scope Ratings' internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting the Credit Rating originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Rating and/or Outlook and the principal grounds on which the Credit Rating and/or Outlook is based. Following that review, the Credit Rating and/or Outlook was not amended before being issued.

Regulatory disclosures
The Credit Rating and/or Outlook is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Rating and/or Outlook is UK-endorsed.
Lead analyst: Michel Bove, Director
Person responsible for approval of the Credit Rating: Philipp Wass, Managing Director
The Credit Rating/Outlook was first released by Scope Ratings on 31 January 2025.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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