S&P Maalot has reaffirmed the local credit rating of Mekorot, Israel’s national water company, at ilAAA, while maintaining a negative outlook. The rating was issued following the latest military conflict, and according to S&P, it reflects Mekorot’s robust financial performance in 2024, including an FFO-to-debt ratio of approximately 4.1% and a debt-to-EBITDA ratio of around 10.
Both are comfortably above the thresholds required for the current rating. The company’s strong business profile, near-total collection rates, exceptionally low water loss (around 3–4%), and its status as a government-owned monopoly contribute significantly to its high rating.
However, the negative outlook stems from the potential downgrade of Israel’s sovereign rating, which could exert downward pressure on Mekorot’s rating due to the close institutional and financial links between the two. During the recent hostilities, Mekorot demonstrated exceptional operational resilience.
The company delivered approximately 42 million cubic meters of water, mobilized about 100 employees to reinforce critical operations, and maintained operations at 20 facilities under security restrictions. Regional control centers operated 24/7 in double shifts, ensuring full preparedness for emergency scenarios.
Mekorot also maintained ongoing coordination with key national stakeholders, including daily engagements at the corporate level, within its internal security division, and with both the Water Authority and the Ministry of Energy, to ensure a stable and continuous water supply across the country.