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EPQL has been operating a 217.3 MW gas based thermal combined cycle power plant near Qadirpur, District Ghotki, Sindh since 2010.
The assigned ratings incorporate sound profile and significant experience of the sponsor (EEL), and satisfactory operational track record of the O and M contractor, EESL. Assessment of the business risk profile indicates low off-take risk due to take or pay tariff awarded whereby EPQL is eligible for guaranteed capacity payments from the power purchaser in case of non-purchase of electricity despite availability. Fuel supply and hike in prices of raw material risks are limited due to long-term supply contract and cost pass through mechanism built in the tariff.
Performance of the plant has remained compliant with normative parameters as laid down in the power purchase agreement (PPA). As projected in the implementation agreement, EPQL is now facing gas curtailment from Qadirpur gas field as it is depleting and has made its plant available on mixed mode i.e. comingling of gas and high-speed diesel from
Financial risk assessment illustrates that cash flows are adequate to service outstanding debt obligations, thereby indicating satisfactory debt servicing ability. Due to inefficiencies in the system, circular debt continues to pose a challenge to the power industry as total overdue receivables to the energy sector continue to depict an increasing trend. Comfort is drawn from recent issuance of
Leverage indicators remain within manageable limits. Going forward, with repayment of long-term debt, leverage indicators are expected to remain a function of utilization of short-term borrowings to fund working capital requirements. Maintaining adequate liquidity profile in increasing circular debt scenario and satisfactory plant operations are considered important rating drivers.
For more information, contact:Director Compliance and Rating Analytics,VIS Credit Rating Company LimitedVIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,Phase VII, DHA,
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