Press Release
VIS Reaffirms Entity Ratings of Quaid-e-Azam Thermal Power (Private) Limited
Karachi, September 10, 2025: VIS Credit Rating Company Limited (‘VIS’) reaffirms Entity Ratings of Quaid-e-Azam Thermal Power (Private) Limited (‘QATPL’ or the ‘Company’) at 'AA+/A1+' (‘Double A Plus/’A One Plus’). Medium to long term rating of ‘AA+’ indicates high credit quality; Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Short-term rating of 'A1+' indicates strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on September 23, 2024.
Quaid-e-Azam Thermal Power (Private) Limited (‘QATPL’ or the ‘Company’) is wholly owned by the Government of Punjab (GoPb). The Company owns and operates Re-Liquefied Natural Gas (RLNG) based Combined Cycle Gas Turbine (CCGT) power plant of 1,163 MW (net) generating capacity at Bhikki, District Sheikhupura, Punjab. Commercial Operation Date (COD) of combined cycle plant was achieved on May 20, 2018. However, National Electric Power Regulatory Authority (NEPRA) determined the final tariff for the Company on Jan 3, 2023.
The entity ratings of QATPL reflect the full ownership by GoPb and assurance of debt servicing under the tariff framework for Independent Power Producer (IPPs). QATPL has maintained a low leverage profile with steady debt repayments backed by sustained operational performance.
Support is derived from the 30-year take-or-pay Power Purchase Agreement (PPA) with Central Power Purchasing Agency (Guarantee) (CPPA-G), sovereign guarantee to pay the IPPs dues in the event that the power purchasing entity defaults on its obligations, provisions to mitigate gas non-supply and delayed payment risks. The long-term Operations and Maintenance (O&M) arrangements with the Original Equipment Manufacturer (OEM) syndicate and General Electric further underpin operational stability.
Following re-negotiation of tariffs with downward revision of ROE from 16% to 13% and capping of dollar rates for state owned plants, profitability has reduced from the earlier levels in FY25. We expect debt servicing to remain protected under the revised tariff framework and with reference to the ownership structure. Provincial government ownership poses a certain level of political risk which may continue to impact the profitability of the Company.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf