Lucky Electric Power Company Secures ‘AA’ Rating for New Debt Instrument

Karachi: Lucky Electric Power Company Limited (LEPCL) has been assigned a preliminary ‘AA’ long-term rating and an ‘A1+’ short-term rating for its new PKR 6 billion debt instrument, PPSTS-21, by The Pakistan Credit Rating Agency Limited (PACRA). The ratings reflect the company’s stable outlook and robust financial performance amid challenging economic conditions.

According to a statement by The Pakistan Credit Rating Agency Limited, LEPCL has successfully connected its 1x660MW coal-fired power plant to the national grid, achieving commercial operation in March 2022. The plant is currently fueled by imported coal under agreements with reputable suppliers, as coal from Sindh Engro Coal Mining Company’s Block-II (Phase III) will only be available from December 2025.

The company’s financial performance has been strong, generating a topline of approximately PKR 41 billion and a bottom line of PKR 10 billion in the first half of fiscal year 2025. LEPCL’s operational stability is supported by its operation and maintenance contractor, Harbin Electric International Co., Ltd., which assumed control of the plant in March 2023.

The company’s borrowings total PKR 131.3 billion, with short-term borrowings reduced to PKR 21.9 billion, down from PKR 25 billion in June 2024. The new debt instrument, PPSTS-21, replaces the maturing PPSTS-20, with a maturity date set for February 2025.

The ratings take into account the financial strength and energy sector experience of LEPCL’s sponsor, Lucky Cement. Despite challenges such as currency devaluation and supply chain issues, the company is managing its working capital needs. A key factor in its financial stability is an offtake agreement with CPPA-G, which includes capacity payments guaranteed by the Government of Pakistan, even if no electricity is purchased.

With these developments, LEPCL remains focused on maintaining operational efficiency and meeting its financial obligations, as it continues to contribute significantly to Pakistan’s electricity supply.

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