Press Release
VIS Assign Preliminary Ratings to K-Electric Limited’s Short Term Sukuk - 32
Karachi, June 05, 2025: VIS Credit Rating Company Limited (‘VIS’) has assigned preliminary instrument ratings of A1+ (plim) (A One Plus Preliminary) to K-Electric Limited’s (“KEL” or “the Company”) Short Term Sukuk – 32 (STS-32). The short-term ratings of A1+ indicates strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. The instrument rating is in line with the entity ratings of the Company of AA/A1+ for Long Term/Short-Term.
KEL plans to issue an unsecured, rated, privately placed STS, up to PKR 10.0 bln inclusive of green shoe option of PKR 2.0 bln. The proceeds from the issue will be utilized to finance the working capital requirements of the company. The tenor of the instrument is up to six months from the date of drawdown. The proposed profit rate is 3M KIBOR with an expected spread of up to 10 basis points per annum. Profit is payable at the time of the maturity of the Sukuk along with the principal payment.
The ratings reflect KEL’s strategic position in powering Karachi—Pakistan’s financial hub—and its commitment to ensuring uninterrupted power supply to the city. However, the ratings also take note of NEPRA’s approval of KE’s supply tariff petition, as per its decision dated May 27, 2025, for the seven-year control period (FY24-30), originally submitted in December 2023. This latest approval follows NEPRA’s prior decisions on KE’s generation tariff (Oct 2024) and the transmission and distribution tariff (May 24, 2025), reflecting sustained regulatory momentum and progress in Pakistan’s transforming power sector landscape. The complete approval of the Multi-Year Tariff (MYT) was issued by NEPRA on May 27, 2025, which was critical for the finalization of the Financial Statements post June 2023. The company is already in the process of preparing and circulating the financial statements.
Moreover, KE is now positioned to implement its proposed USD 2.0 billion Investment Plan FT 24-30 and ensure access to affordable, reliable and sustainable energy for all. However, this is subject to NEPRA’s final approval of the Investment Plan. The same is aimed for 30% growth in customers, 20% increase in KE’s share of renewables and another 30% reduction in power outages. KE has advanced its renewable energy initiatives, securing competitive tariff bids for its 100 MW Bela and 50 MW Winder projects, along with a 220 MW hybrid solar-wind project. The company has also completed the bidding process for 270 MW Sindh Solar Energy Projects and submitted the Auction Evaluation Report to NEPRA for its approval. These developments reflect KE’s ongoing efforts to diversify its energy mix and reduce dependence on imported fuels, while also facilitating investor participation in the sector.
According to the management, the Company’s cash flow position and debt profile have remained stable and are expected to be maintained in the future. Following the finalization of the MYT by NEPRA, in alignment with KEL’s future investment plans, an increase in debt levels is anticipated commensurate with increase in demand. Moreover, management has indicated that all debt obligations are being met on schedule and will continue to be serviced in a timely manner.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Corporate Rating
https://docs.vis.com.pk/docs /CorporateMethodology.pdf
Instrument Rating
https://backupsqlvis.s3.us-west-2.amazonaws.com/Methodologies-2025/IRM-Apr-25.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf