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Lahore, August 16, 2023 (PPI-OT): The ratings reflect National Transmission and Despatch Company’s (NTDC) “the Company” ownership structure dominantly owned by the Government of Pakistan (GoP). The Company is of strategic importance to Pakistan as being an autonomous power transmission utility. It is mandated to construct, maintain and operate an integrated network of 220 kV, 500 kV, and above transmission lines and grid stations to evacuate power from an installed generation capacity of over 43,775 MW. NTDC’s low business risk emanates from its leading market position and strong hold on the transmission system in terms of its technical and business expertise.
Moreover, the Company’s operational expenses being part of its tariff reflect positively on its performance and business risk profile. During 9MFY 2022-23, NTDC received a total of 97,106 GWh of energy and delivered 94,700 GWh of energy through CDPs all over Pakistan. T and T losses expressed as a percentage of energy received by NTDC were 2.477% for 9MFY 2022-23. The Company’s transmission losses are within the limits allowed by NEPRA. The Company has undertaken and completed multiple projects that will improve transmission efficiency by managing the load including the completion of 500kV Thar-Matiari Transmission line to evacuate power from coal-based power plants in Thar. With its extensive transmission network spread all over Pakistan, NTDC dominates the electricity transmission industry.
Ratings also take into account the Company’s moderate financial risk emanating from sizable equity, an adequate capital structure that comprises mainly of foreign loans relent in Pak Rupee to NTDC and borrowing from the local banks. Furthermore, company’s in-house working capital management is reflected in strong internal cash generation and constructive management of circular debt by adjusting its receivables with repayments due against foreign loans relent to NTDC by GoP. The Company is in the process of implementing ERP System that aims at achieving business automation in the Company.
Effective management and timely completion of upcoming projects as well as consistency in financial profile and risk matrices remains critical for the ratings. Meanwhile, reconciliation of outstanding adjustments regarding Business Transfer Agreements and sustained competitive positioning are also imperative for ratings.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com
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