PACRA Affirms AAA Rating for WAPDA Debt Instrument, Citing Strategic Importance

LAHORE: The Pakistan Credit Rating Agency Limited (PACRA) has affirmed the AAA long-term rating for the Pakistan Water and Power Development Authority’s (WAPDA) debt instrument, maintaining a stable outlook. This decision underscores the strategic importance of WAPDA as Pakistan’s primary entity for developing water and hydropower resources.

According to Pakistan Credit Rating Agency Limited, WAPDA’s projects largely benefit from funding by the Government of Pakistan through grants, re-lending, and loans, coupled with a tariff scheme that ensures operational cost coverage and a reasonable return on investment. The Dasu Hydropower Project, launched in 2017, exemplifies this government-backed initiative. Located in Dasu Kohistan, Khyber Pakhtunkhwa, this project is set to become Pakistan’s second-largest hydropower facility upon its expected completion in May 2027.

The Dasu project, with a total capacity of 4,320 MW, is progressing in two stages, with Stage-I expected to generate 12,220 GWh annually. As of now, the project has achieved 22.36% physical progress and 63.78% financial progress. Key milestones reached include land acquisition, construction of the upstream starter dam, and excavation for a 765 KVA switchyard.

The financing of the project combines WAPDA’s internally generated funds and external borrowing, with the Government providing an unconditional guarantee for the debt instrument. This guarantee ensures payment of the outstanding amount and associated profits, as the Government would promptly respond to any demand notice. Furthermore, WAPDA maintains a Debt Payment Account to ensure timely installment payments.

Future plans for FY25 include further excavations and infrastructure development, reinforcing WAPDA’s strategic role in Pakistan’s energy sector. The government is expected to maintain full ownership and control, reflecting its commitment to supporting WAPDA’s operations.

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