PACRA assigns preliminary ‘AA’ rating to Lucky Electric Power

February 13, 2025 (MLN): Pakistan Credit Rating Agency Limited (PACRA) has assigned a preliminary rating to Lucky Electric Power Company Limited (LEPCL) at "AA" for the long term and "A1+" for the short term, with a stable outlook, according to its latest press release.

LEPCL has set up a 1x660MW (gross) coal-fired power plant.

The project achieved COD on March 22 and is successfully connected to and providing electricity to the grid.

The primary fuel is coal, and a coal supply agreement has been signed with Sindh Engro Coal Mining Company (SECMC).

SECMC will provide coal from its developing Block II (Phase III), which is set to begin on December 25.

The previous tentative month was Dec-24.

The Company has also signed imported coal supply agreements with reputable coal suppliers.

Currently, the plant is generating electricity through imported coal.

The Company has generated a topline of approximately Rs 41bln during 6MFY25.

Lucky Electric Power Company Limited generated a bottom line of around Rs10bln during the same period.

Comfort is drawn from the experience of O&M contractor, Harbin Electric International Co., Ltd.

 P.R. China (HEI), which took over the plant from the previous operator in Mar-23.

Going forward, the Company’s main focus would be to keep the plant operational. In 6MFY25, the Company has total borrowings of Rs131.3bln including short-term borrowing of Rs21.9bln.

The Company has only 5bln of short-term debt instruments as compared to 25bln on June 24.

PPSTS-21 is being issued in replacement of PPSTS-20 maturing on 17-Feb-25.

The financial strength and experience in the energy chain of the sponsoring company Lucky Cement – are considered positive for the ratings.

However, considering the unusual increase in working capital requirement due to the significant devaluation of PKR, supply chain issues, and tariff adjustments, LEPCL is striving to manage its needs.

The offtake agreement is with CPPA-G, which will, upon the plant’s availability as per the contract, provide capacity payments even if no purchase order is placed.

The Government of Pakistan has given a payment guarantee against dues from CPPA-G.

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