Press Release

VIS assigns Initial Ratings to Punjab Thermal Power (Pvt.) Limited

Karachi, June 10, 2020: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘AA-/A-1’ (Double A Minus/A-One) to Punjab Thermal Power (Pvt.) Limited (PTPL). 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 high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned rating is ‘Stable’.

PTPL is a combined cycle power project of 1,263.2 MW on Re-gasified Liquefied Natural Gas as the primary fuel and High-Speed Diesel as back-up fuel located near Haveli Bahadur Shah /Trimmu Barrage, District Jhang, Punjab. National Electric Power Regulatory Authority granted power generation license to PTPL in February 2018. The project is in advance stage of implementation by an experienced EPC contractor. The management expects the project to be operational within the planned schedule in 2020.

The ratings assigned to PTPL incorporate its strong ownership profile being wholly owned by Government of Punjab, through Energy Department. Moreover, underlying economic risk factors are largely mitigated by initialing of 30 year-long power purchase agreement (PPA), in pursuance of ECC decision with Central Power Purchasing Agency Guarantee Limited which shall be signed by Mid of June 2020. The ratings also draw comfort from government guaranteed cash flow stream under the agreement upon meeting certain performance benchmarks. The ratings remain dependent upon timely completion of the project as per terms of agreement with the power purchaser. Moreover, upholding operational performance in line with agreed performance levels would remain a key rating driver. In addition, the ratings will be revised if there is any change in the PPA.

For further information on this rating announcement, please contact Ms. Maham Qasim (042-35723411-13, Ext. 8005) and/or the undersigned at 021-35311861-66 (Ext. 201) or email at .

Faryal Ahmad Faheem
Deputy CEO

Applicable rating criterion: Corporates (May 2019)

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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited