Press Release

Update on Instrument Rating of Neelum Jhelum Hydropower Company (Pvt.) Limited

Karachi, August 16, 2024: VIS Credit Rating Company Limited (VIS) takes note of the complete shutdown of Neelum Jhelum Hydropower Project (‘’the Project’’) since May 01, 2024 due to cracks appearing in the headrace tunnel. The last instrument ratings of Neelum Jhelum Hydropower Company (Pvt.) Limited (‘’NJHPC’ or ‘’the Company’’) of ‘AAA’ (Triple A) with a ‘Stable’ outlook was announced on January 12, 2023.

VIS has been informed by the Company that the operations of hydropower project has been suspended to undertake repair works of the headrace tunnel, with an estimated recovery period of up to 18 months. The assigned rating takes into consideration Company’s confirmation of continuation of debt servicing during this period through the monthly receipt of outstanding receivables from the Central Power Purchasing Agency (CPPA) backed by the sovereign guarantees. The Sukuk trustee has verified that all principal and interest payments under the Debt Payment Agreement (DPA), including the payment due at the end of June 2024 are up to date.

The rating assigned to the Sukuk issue takes into account unconditional and irrevocable first demand guarantee issued by the President of 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 support from the parent entity, Water and Power Development Authority (WAPDA), in the form of equity injection and funding support.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.

Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 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 August 16, 2024 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.