Press Release
VIS Assigns Final Ratings to K-Electric Limited’s Short Term Sukuk - 32
Karachi, June 23, 2025: VIS Credit Rating Company Limited (‘VIS’) has assigned final instrument ratings of A1+ (A One Plus) 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. Previous rating action was announced on June 05th 2025.
KEL has issued an unsecured, rated, privately placed STS, of PKR 10.00 bln. The proceeds from the issue will be utilized to finance the working capital requirements of the Company. The STS was issued on June 12, 2025, redemption with profit and principal amount is scheduled for December 12, 2025. The tenor of the instrument is up to six (06) months from the date of drawdown. The proposed profit rate is 3M KIBOR with a negative spread of 5 basis points (bps) per annum. Profit is payable at the time of the maturity of the Sukuk along with the principal payment. The Issue Agent for this issue is Habib Bank Limited (“HBL”).
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 note NEPRA’s approval of K-Electric’s generation, transmission, distribution, and supply tariff petitions for the seven-year control period from FY 2024 to FY 2030, reflecting sustained regulatory momentum and progress in Pakistan’s transforming power sector landscape. This decision marks a significant milestone for KE in realizing its Comprehensive Investment Plan 2030, which entails the Company’s efforts to further reduce losses in its transmission and distribution network, drive growth in its customer base, and bolster the power utility’s infrastructure to meet current demands and future needs. The complete approval of the Multi-Year Tariff (MYT) was issued by NEPRA on May 27, 2025, a critical step for the finalization of the financial statements post-June 2023. The management has indicated that it is preparing the financial statements for FY24.
Moreover, K-Electric Limited subject to NEPRA’s final approval of the Investment Plan, would be in a positioned to implement its proposed USD 2.0 billion, Investment Plan FY 24-30 for sustainable supply of energy encompassing 30% growth in customers, 20% increase in KE’s share of renewables and another 30% reduction in power outages. KEL has advanced its renewable energy initiatives, securing necessary approvals from NEPRA respectively 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.
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.
The assigned ratings are dependent upon the management view of no material adverse outcome of the intended review petition by the Government for the MYTD.
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