Lahore, August 30, 2023 (PPI-OT): Engro Energy Limited (EEL) along with China Machinery and Engineering Corporation (CMEC) has set up first Thar coal based (2 x 330 MW) power plant (Complex) - Engro Powergen Thar(Pvt.) Limited (EPTL). Since its COD in July’19, EPTL is running its operations smoothly and sustainably and achieving operational benchmarks. The primary fuel is Thar Coal; however, the plant can accommodate imported coal. A 30-year coal supply agreement is signed with Sindh Engro Coal Mining Company (SECMC), which is operating a coal mine in Thar Block-II. The coalmine’s COD was July-19. The Company's both units were successfully connected to and are providing electricity to the grid. At the period ended Jun'23, EPTL sales revenue of PKR ~48,240mln along with Net Profit (N.P) of PKR 12,497mln (CY22: N.P ~PKR 16,262mln). The financial strength and experience in the energy chain of the sponsoring companies - EEL and CMEC - is positive to the ratings.

EPTL has built its own financial strengths in a short span of time by adding to its equity base. The Company reported FCFO of PKR ~23,365mln as at end Jun’23. Going forward, the Company’s main focus would be to keep the plant operational. Power purchase agreement is with CPPA-G, which will, upon plant’s availability as per contract, provide capacity payments even if no off take by power purchaser. The Government of Pakistan has given payment guarantee against dues from CPPA-G.

The management’s ability to effectively manage EPC risks and COD provides comfort. Trend in operational profitability would bode well for rating. The availability of Thar Coal is critical. External factors such as any changes in the regulatory framework may impact the ratings.

For more information, contact:

Analyst,

The Pakistan Credit Rating Agency Limited (PACRA)

Awami Complex, FB1, Usman Block New Garden Town,

Lahore, Pakistan

Tel: +92-42-5869504-6

Fax: +92-42-5830425

Email: hammad.rashid@pacra.com

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