AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: Liberty Power Tech Limited, a key player in Pakistan’s energy sector, is adapting to recent power sector reforms while maintaining its financial stability. The company, which operates a 200 MW Residual Fuel Oil-based power plant, recently amended its 25-year Power Purchase Agreement with the Central Power Purchasing Agency Guarantee Limited. This amendment introduces a Hybrid Take and Pay model, reducing capacity tariffs and adjusting other tariff components.
As part of the revised agreement, outstanding receivables as of November 2024 have been cleared, significantly reducing the company’s financial backlog for fiscal year 2025. Additionally, Liberty Power Tech has waived delayed payment interest charges up to October 31, 2024. Despite these adjustments, the company reported a net loss for the period due to a one-time financial adjustment related to prior periods.
The company’s power generation has decreased, operating at a reduced capacity factor of 4.53% in FY25, compared to 14% in FY24. This decline is attributed to a shift in demand towards cheaper energy sources like hydro, local coal, and renewables, in line with the power purchaser’s cost-optimization strategy.
Despite lower plant utilization, Liberty Power Tech remains profitable when excluding the one-time adjustment, supported by a technically proficient operations team. The company is managing its working capital through internal cash flows and bank borrowings, maintaining a debt-free balance sheet after fully repaying project-related obligations.
Liberty Power Tech’s financial profile is further bolstered by a robust investment portfolio, providing steady income and cushioning the impact of revised tariffs. This financial strength enhances the company’s credit quality, as affirmed by the Pakistan Credit Rating Agency, and underscores its sound financial discipline.
The company continues to focus on maintaining plant availability and operational performance to uphold its ratings. Despite sector-wide challenges, strong sponsor backing and a diversified investment portfolio ensure liquidity support, reinforcing Liberty Power Tech’s financial stability and resilience.