Press Release

VIS Reaffirms Instrument Rating of Neelum Jhelum Hydropower Company (Pvt.) Limited

Karachi, December 30, 2020: VIS Credit Rating Company Limited (VIS) has reaffirmed the rating of ‘AAA’ (Triple A) assigned to Sukuk issue of Rs. 100b of Neelum Jhelum Hydropower Company (Pvt.) Limited (NJHPC). The medium to long-term rating of ‘AAA’ denotes highest credit quality with negligible risk factors being only slightly more than risk-free Government of Pakistan’s debt. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 24, 2019.

The rating assigned to the Sukuk issue take into account unconditional and irrevocable first demand guarantee issued by the President Islamic Republic of Pakistan (on behalf of the Government of the Islamic Republic of Pakistan) (GoP) covering issue amount of the Sukuk along with profit payments. GoP would immediately pay the entire called amount once the demand notice from the trustee is received. Ratings also incorporate strong financial muscle and implicit support from the parent entity, Water and Power Development Authority (WAPDA), in the form of equity injection and funding support.

The Sukuk is unlisted, privately placed, 10-year tenor instrument with grace period of two years. The first five payments have been made. The company signed an interim Power Purchase Agreement (PPA) with CPPA-G on January 8, 2020, which was valid for one year effective from revised tariff notification date (October 17, 2019) and was extendable with mutual consent of all parties. Subsequent to the lapse of one year ended on October 16, 2020, the management has not opted for extension of interim PPA given that the company has filed a petition regarding final tariff with CPPA-G for onward submission to NEPRA. NJHPC expects that NEPRA would determine the final tariff by end-March’21 that will be effective from the commercial operation date. The ratings are dependent upon tariff structure being approved in line with debt service obligations of the company.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable rating criterion: Corporates (May 2019)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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