Press Release

VIS Reaffirms Entity Ratings of Punjab Thermal Power (Pvt.) Limited

Karachi, June 9, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings assigned to Punjab Thermal Power (Pvt.) Limited (PTPL) at ‘AA-/A-1’ (Double A Minus/A-One). The medium to long-term rating of ‘AA-’denotes high credit quality coupled with strong protection factors. Moreover, risk factors may vary slightly with possible changes in the economy. 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 rating is ‘Stable’. Previous rating action was announced on July 1, 2021.

The ratings assigned to PTPL incorporate its strong ownership profile being wholly owned by a sub-sovereign, Government of Punjab (GoPb) through Energy Department. PTPL is a combined cycle power project of 1,263.2 MW on Re-gasified Liquefied Natural Gas (RLNG) as the primary fuel and High-Speed Diesel (HSD) as back-up fuel located near Haveli Bahadur Shah/Trimmu Barrage, District Jhang, Punjab, Pakistan. The project was approved by the Cabinet Committee on Energy (CCoE) of the Federal Government in June 2017. PTPL filed application for grant of generation license in July 2017; meanwhile, National Electric Power Regulatory Authority (NEPRA) granted power generation license to PTPL in February 2018.

Power Purchase Agreement (PPA) has been signed for 30 years with Central Power Purchasing Agency Guarantee Limited (CPPA-G) in June 2020. CCoE approved reduction in capacity charges of Government owned projects in Aug’20 and revised the ROE to 12% with dollar-based indexation. The company entered into Gas Supply Arrangement for 15 years with Sui Northern Gas Pipeline Limited in August 2020. Financial close was achieved in April 2021. The commissioning of both turbines is in progress while independent engineer has recently issued certificate of readiness for synchronization of the turbines. The project is contemplated to commence simple cycle operations by end-Jun’22 and combined cycle operations are expected to start by end-Aug’22. Business risk profile draws support from long-term Operations & Maintenance (O&M) contract in place with an experienced O&M operator. The ratings also draw comfort from government guaranteed cash flow stream under the agreement upon meeting certain performance benchmarks. Meanwhile, the ratings will remain dependent on the projected earnings to duly compensate for the adverse impact on funding needs caused by sharp devaluation in local currency and interest rate hike. Further, the ratings are sensitive to achievement of commercial operations within stipulated timeframe.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz, CFA at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 207) or email at

Sara Ahmed

VIS Entity Rating Criteria: Corporates (August 2021)

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