Lucky Electric Power Company Receives Initial Rating from PACRA

Karachi: Lucky Electric Power Company Limited (LEPCL) has been assigned an initial rating by The Pakistan Credit Rating Agency Limited (PACRA), marking a significant milestone for the power company. The rating pertains to the company’s issuance of PPSTS-21, a financial instrument valued at PKR 6 billion, set to mature in February 2025.

LEPCL has established a coal-fired power plant with a capacity of 660 megawatts. Operational since March 2022, the facility is connected to the national grid, supplying electricity to meet the country’s energy demands. The plant primarily relies on coal, sourced under an agreement with Sindh Engro Coal Mining Company (SECMC). While the coal supply from SECMC’s developing Block-II (Phase III) was initially expected to commence in December 2024, it has been postponed to December 2025. In the interim, LEPCL is utilizing imported coal to maintain electricity generation.

During the first half of the fiscal year 2025, LEPCL reported a revenue of approximately PKR 41 billion and a net profit of PKR 10 billion. The company benefits from the expertise of its operations and maintenance contractor, Harbin Electric International Co., Ltd. from China, which assumed responsibility for the plant’s operations in March 2023.

LEPCL’s financial strategy focuses on maintaining plant operations while managing its borrowings, which total PKR 131.3 billion, with PKR 21.9 billion being short-term. The company has successfully reduced its short-term debt instrument from PKR 25 billion in June 2024 to PKR 5 billion. The PPSTS-21 issuance replaces the matured PPSTS-20, which concluded on February 17, 2025.

The involvement of Lucky Cement, the sponsoring company, contributes positively to LEPCL’s ratings due to its financial strength and experience in the energy sector. Despite facing challenges such as the devaluation of the Pakistani rupee, supply chain disruptions, and tariff adjustments, LEPCL is actively managing its working capital requirements. An offtake agreement with the Central Power Purchasing Agency-Guaranteed (CPPA-G) ensures capacity payments to LEPCL, even in the absence of purchase orders, with a payment guarantee provided by the Government of Pakistan.

The PACRA rating reflects LEPCL’s strategic positioning and financial management within Pakistan’s energy landscape.