PACRA Reaffirms AAA Rating for WAPDA Dasu Sukuk-E

Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has maintained its long-term AAA rating for the WAPDA Dasu Sukuk-E, citing the strategic importance of the Pakistan Water and Power Development Authority (WAPDA) in the country’s water and hydropower sectors.

The rating, which remains stable since its initial assessment, underscores WAPDA’s pivotal role as Pakistan’s primary entity for developing water resources. The projects under WAPDA are largely funded through government grants, loans, and a favorable tariff scheme that ensures cost recovery and returns on investment.

A significant aspect of the rating is the unconditional and irrevocable guarantee by the Government of Pakistan, ensuring the payment of the Sukuk’s outstanding amount and its profit component. The government has committed to cover the entire called amount immediately upon receipt of a demand notice from the issue agent.

In addition to government backing, WAPDA has established a Debt Payment Account (DPA) managed by a Facility Agent, which helps secure the timely fulfillment of financial obligations. WAPDA deposits monthly amounts into this account to cover upcoming installments.

The Dasu project has achieved 24.25% physical progress and 71.24% financial progress. Notable milestones include the acquisition of all required land, completion of the upstream starter dam, and the excavation of critical infrastructure, such as a 765 KVA switchyard.

The project’s financing comprises 15% from WAPDA’s internally generated cash and 85% from borrowing, including local and foreign long-term loans and bond issuances.

With WAPDA’s crucial strategic role and robust government backing, the agency is expected to maintain full ownership and control of its operations in the foreseeable future.