Ratings agency Standard & Poor’s has upgraded its credit rating for semi-State company Ervia to ‘A-‘.

Ervia - formerly Bord Gáis Éireann - manages the country’s gas and water infrastructure on behalf the State, via Gas Networks Ireland and Irish Water.

S&P said the one-notch upgrade of Ervia follows a similar upgrade of Ireland’s main credit rating to ‘A’, and reflects its expectation that the Government would provide “extraordinary support in the event of financial distress”.

The agency also said the company’s risk profile was “excellent” due to its strong position in the local gas market.

However S&P also pointed to challenges facing Irish Water around billing and investment in the network as a key weakness in the company’s profile.

Though it said it expected funding for Irish Water to be ring-fenced from Ervia itself, limiting its exposure to any related costs as a result.

S&P said it could raise its rating on the company again if it were to do so on Irish debt first. The rating could also fall if Ireland was given a downgrade.

Ervia’s rating could also be upgraded if its stand-alone credit profile improved, though the agency said this was unlikely at present as the company was constrained by the uncertainties coming from the transition of Irish Water from State-supported entity to independently regulated utility.