Press Release

VIS Reaffirms Instrument Rating of Neelum Jhelum Hydropower (Private) Company Limited

Karachi, December 24, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed the rating of “AAA’ (Triple A) assigned to Sukuk issue of Rs. 100 billion of Neelum Jhelum Hydropower Company (Private) Limited (NJHPC). The medium to long-term rating of ‘AAA’ denotes highest credit quality with negligible risk factors being only slightly more than risk-free Government of Pakistan’s debt. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on January 02, 2019.

The rating assigned to the Sukuk issue take into account unconditional and irrevocable first demand guarantee issued by the President Islamic Republic of Pakistan (on behalf of the Government of the Islamic Republic of Pakistan) (GoP) covering issue amount of the Sukuk along with profit payments. GoP would immediately pay the entire called amount once the demand notice from the trustee is received. Ratings also incorporate strong financial muscle and implicit support from the parent entity, Water and Power Development Authority (WAPDA), in the form of equity injection and funding support.

The Sukuk is unlisted, privately placed, 10-year tenor instrument with grace period of two years. The first two payment have been paid. The provisional tariff was unacceptable to NJHPC therefore the company filed review petition before NEPRA. The revised provisional tariff was announced on 19th August’19 which included components of debt repayment and operations & maintenance; however the components of insurance, water use surcharge and profitability will be added once the final tariff is decided. No invoice on account of sale of power has been raised so far due to non-signing of Power Purchase Agreement (PPA) with CPPA-G, discussions are in progress for signing of PPA. Invoice will be raised with arrears once PPA is signed between NJHPC and CPPA-G. Final tariff approval by NEPRA will be crucial to the debt servicing capacity of the company and the assigned ratings. The ratings are dependent upon tariff structure being approved in line with debt service obligations of the company.

For further information on this rating announcement, please contact Ms. Maham Qasim at 042-35723411-13 (Ext: 8005) or the undersigned at 021-35311861-70 (201) or email at

Javed Callea

Applicable rating criterion: Corporates (May 2019)
Notching the Issues (June 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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