Press Release

VIS Reaffirms Entity Ratings of Thal Power (Private) Limited

Karachi, December 30, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Thal Power (Private) Limited (TPPL) at ‘AA/A-1+’ (Double A /A-One Plus). The long-term rating of ‘AA’ signifies 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+’ signifies highest certainty of timely payment; short term liquidity, including internal operating factors and /or access to alternative sources of funds, is outstanding and safety is just below risk free Government of Pakistan’s short-term obligations. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on January 17, 2022.

TPPL is a wholly-owned subsidiary of Thal Limited (THAL); the assigned ratings derive strength from the strong sponsor profile. THAL is a diversified national conglomerate engaged in the manufacturing of engineering products, jute products, paper sacks, and laminated products; it also holds investments in real estate and energy sectors. TPPL was setup by THAL as a special entity for the purpose of routing its investment in ThalNova Power Thar (Private) Limited (ThalNova). Thal Ltd. owns 26% ordinary shareholding in ThalNova through TPPL.

ThalNova is a joint venture between TPPL, Nova Powergen Ltd (subsidiary of Novatex Ltd), CMEC ThalNova Power Investments Limited (a subsidiary of China Machinery Engineering Corporation), and Hub Power Company Limited to set up a 330 MW mine mouth coal-fired power generation plant located at Thar, Sindh. This power plant will be run on indigenous coal extracted from the mine operated by Sindh Engro Coal Mining Company Limited. The Power Plant is listed under Priority Projects under the China Pakistan Economic Corridor (CPEC). ThalNova achieved its Financial Close on September 30, 2020. THAL has undertaken to invest an amount of the PKR equivalent of USD 34.3m and of this, USD 26.1m has already been injected. The balance commitment of the investment is USD 8.2m.

The Company was expected to achieve its Commercial Operations Date (COD) in June’22, however, the date was pushed forward due to the covid induced lockdown in China. As per management, the boilers have been fired recently, which indicates the initiation of the syncing process of the plant to the grid. The management is sanguine that with no major risk of further delay and no critical equipment stuck at the port, the plant is ~ 50 days behind its Reliability Running Test (RRT) subsequent to which the plant will achieve its COD in the month of February 2023. Achievement of COD will remain a key rating driver.

For further information on this rating announcement, please contact Ms. Arsal Ayub, CFA (Ext: 215) or the undersigned (Ext: 207) at (021) 35311861-66 or email at

Sara Ahmed

Applicable Rating Criteria: Industrial Corporates (August 2021)

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 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .