Press Release
VIS Reaffirms Entity Ratings of Punjab Thermal Power (Private) Limited
Karachi, December 3, 2025: VIS Credit Rating Company Limited (VIS) reaffirms entity ratings of Punjab Thermal Power (Private) Limited (“PTPL” or “the Company”) at 'AA/A1' (Double A/A One). 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 strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on October 2, 2024.
PTPL was incorporated on June 08, 2017, as a private limited company by the Government of Punjab (GoPB) through the Energy Department. It operates as a wholly owned entity of the GoPB and was established with the primary objective of setting up, operating, and managing a 1263.2 megawatt (MW) (Net: 1,242.7 MW) Re-gasified Liquefied Natural Gas (RLNG) combined cycle thermal power plant at Haveli Bahadur Shah, near Trimmu barrage, Jhang, Punjab formed under Power Policy, 2015. The Company functions as an Independent Power Producer (IPP). It was initially approved with Return on Equity (ROE) of 15% (Indexation with USD) and was later on reduced to 12% (Indexation with USD).
The assigned ratings reflect the strong credit profile of the Company supported by full provincial ownership, established operational infrastructure, and the stability provided by its long-term contractual power off take arrangements. The Company also benefits from a cost-plus tariff structure that ensures recovery of fixed costs and protects cash flows from volatility in demand and fuel prices. Despite a period of reduced plant availability following an operational incident, overall business risk remains contained due to the location of the plant in the load center where it facilitates the stability of the national grid. Profitability remained resilient, aided by insurance recovery that offset the moderation in margins caused by lower dispatch. Financial risk has eased as scheduled debt repayments and improved working-capital management strengthened coverage and liquidity indicators, while reduced finance costs supported bottom-line performance. Although delays in payments from the power purchaser and evolving regulatory reforms present ongoing challenges, sovereign backing of contractual obligations, established payment mechanisms, and a track record of support mitigate the associated risks.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria:
Corporate Rating
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf