Press Release

VIS Reaffirms Ratings of Quaid-e-Azam Thermal Power (Private) Limited

Karachi, August 23, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Quaid-e-Azam Thermal Power (Private) Limited (QATPL) at ‘AA/A-1’ (Double A/ A-One). The medium to long-term rating of ‘AA’ denotes high credit quality; protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. The short-term rating of ‘A-1’ denotes high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on June 30, 2022.

QATPL 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 generation capacity at Bhikki, District Sheikhupura, Punjab. The ratings draw comfort from the presence of a clause in the Power Purchase Agreement (PPA) whereby QATPL will continue to receive capacity payments during the period of non-supply of gas. In addition, the “Suspension” clause in the PPA allows the company to suspend its plant operations if the receivables due from Central Power Purchase Agency (Guarantee) Limited (CPPA), at any point in time remains outstanding for 60 days or more, while QATPL will continue to receive capacity payments during the suspension period. This provision further protects the company from the circular debt risk. NEPRA determined the final tariff at COD for the Company on Jan 3, 2023.

Albeit QATPL continued to remain high in merit order list amongst power projects operating on RLNG, the annual load dispatch factor of the plant has been reported relatively lower primarily as a result of new capacity additions in nuclear and coal power projects coming online in the past two years under China-Pakistan Economic Corridor (CPEC) initiatives. In Aug’23, sister concern of QATPL, Punjab Thermal Power (Pvt.) Limited was also connected to the grid after commencement of its single cycle operations. Besides this, reduction in demand was witnessed in line with economic slowdown induced by various internal and external factors which resulted in further decline in energy delivered in HY23. However, the profitability profile of the company is supported by guaranteed capacity payments and dollar indexed tariff components. The interest income on delayed payments from CPPA-G has supported the bottomline on a timeline basis. On Aug 2, 2022, London Court of International Arbitrations (LCIA) announced an Award against the Company in respect of the ‘Take or Pay’ (ToP) case by SNGPL. Financial risk profile of QATPL derive strength from improvement in cash flow coverages and leverage indicators on a timeline basis. The ratings also incorporate adequate corporate governance framework underpinned by effective board oversight.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz, CFA at 042-35723411-13 (Ext. 8001) and/or the undersigned at 021-35311861-64 (Ext. 207) or email at

Sara Ahmed

VIS Entity Rating Criteria: Industrial Corporates (May 2023)

VIS Rating scale

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