VIS Reaffirms Entity Ratings of Engro Powergen Qadirpur Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- June 23, 2021 (PPI-OT)

Following is the text of press release issued by VIS Credit Rating Company Limited

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VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of Engro Powergen Qadirpur Limited (EPQL) at 'AA-/A-1' (Double A Minus/A-One). The long term rating of 'AA-' signifies high credit quality; protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. The short term rating of 'A-1' signifies high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned ratings is 'Stable'. Previous rating action was announced on June 5, 2020.

EPQL has been operating a 217.3 MW gas based thermal combined cycle power plant near Qadirpur, District Ghotki, Sindh since 2010. Engro Energy Limited (EEL), a subsidiary of Engro Corporation Limited (Engro), has majority shareholding in the company with 69% ownership while remaining stake is held by general public. EPQL has outsourced its operations and maintenance (O and M) services to Engro Energy Services Limited (EESL).

The assigned ratings incorporate sound profile, significant experience of the sponsor (EEL), and satisfactory operational track record of the O and M contractor, EESL. Assessment of the business risk profile indicates low off-take risk due to take or pay tariff awarded whereby EPQL is eligible for guaranteed capacity payments from the power purchaser in case of non-purchase of electricity despite availability. Fuel supply and price risks are limited due to long-term supply...