VIS reaffirms entity ratings of EPQL

July 15, 2022: VIS Credit Rating Company Limited has reaffirmed the entity ratings of Engro Powergen Qadirpur Limited at double A minus/A-one.

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, said a press release on Friday.

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. The previous rating action was announced on June 23, 2021.

The assigned ratings to EPQL take into account low business risk profile of the Company underpinned by inking of 25-year long a power purchase agreement with ‘take or pay’ provision with Central Power Purchasing Agency (CPPA-G) from Commercial Operations Date.

Moreover, the Implementation Agreement (IA) was signed between the Islamic Republic of Pakistan through Private Power Infrastructure Board and EPQL in 2007. Presence of long-term PPA with guaranteed capacity payments mitigates off-take risk as obligations of power purchaser are backed by sovereign guarantee.

APP