Karachi, September 13, 2022 (PPI-OT):VIS Credit Rating Company Limited (VIS) notes that due to unexpected cracks in the tailrace tunnel, the Neelum Jhelum Power Station has been shut down on July 07, 2022 as informed by WAPDA. The last instrument ratings of Neelum Jhelum Hydropower Company (Pvt.) Limited (NJHPC) of ‘AAA’ (Triple A) with a ‘Stable’ outlook was announced on January 12, 2022.

VIS has been informed that the project has been shut for an estimated time of 6 months due to an unforeseen incident at Tailrace Tunnel. The inspection of the damaged area has been done and the recovery activities are underway that may take up to 6 months. As per management, debt servicing during the tenure of the shutdown will be arranged though monthly receipt of outstanding receivables from Central Power Purchasing Agency (CPPAG). The trustee has confirmed collection of up to date principal and interest payments in the Debt Payment Account (DPA). VIS will continue to track the balance of DPA on a monthly basis. Any shortfall in the same during any month may warrant revision in ratings.

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.

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/