Karachi, The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed the entity ratings of Lucky Electric Power Company Limited (LEPCL) at 'AA' for long term and 'A1+' for short term, maintaining a stable outlook. These ratings reflect LEPCL's consistent performance and strategic operational dynamics, particularly following the commissioning of its 1x660MW coal-fired power plant in March 2022.

According to The Pakistan Credit Rating Agency Limited, LEPCL, which has been operational since achieving its Commercial Operation Date (COD) last year, relies primarily on coal supplied by the Sindh Engro Coal Mining Company (SECMC) and imported coal. The change in SECMC’s coal supply commencement from May 2024 to December 2024 is noted, with the interim needs being met through imported coal. The company reported substantial electricity generation and financial turnover during the first half of the fiscal year 2024, showcasing a strong market presence.

LEPCL's financial strategy includes significant short-term financing, majorly utilized as of December 2023, alongside outstanding debt instruments aimed at operational funding. The management's focus remains on ensuring the plant's continuous operation, with operational maintenance under the expertise of M/s Harbin Electric International Co., Ltd. from China.

The ratings also consider the robust backing of Lucky Cement, LEPCL’s sponsoring company, providing liquidity support and financial stability. The offtake agreement with the Central Power Purchasing Agency Guarantee (CPPA-G) ensures capacity payments under contract terms, with the Government of Pakistan providing additional payment guarantees.

PACRA highlights the importance of sustained operational profitability and effective risk management for LEPCL, noting that external regulatory changes could impact future ratings.