Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the entity ratings of the National Grid Company of Pakistan Limited (NGC), highlighting its strategic importance to the national power infrastructure. NGC, formerly known as the National Transmission and Despatch Company Limited, plays a critical role as the country's primary power transmission utility, responsible for developing and maintaining an integrated transmission network.
The company's ratings reflect its essential role and sovereign ownership, predominantly held by the Government of Pakistan (GoP). NGC successfully executed several infrastructure projects during the fiscal year 2025 to optimize system load and enhance efficiency. The company's low business risk profile is attributed to its dominant market position and technical expertise.
NGC operates under a return-on-investment model, ensuring full cost recovery through tariffs. Although its Multi-Year Tariff (MYT) expired in FY22, NGC continues to generate revenue based on a previously fixed tariff while awaiting approval of a revised tariff petition submitted to the National Electric Power Regulatory Authority (NEPRA).
In FY25, NGC reported receiving 133,621 GWh and delivering 130,189 GWh, with transmission and transformation losses well within NEPRA's allowed limits. The company recorded a revenue of PKR 53,076 million during the first nine months of FY25, an increase from the previous year, driven by a reduction in finance costs due to declining policy rates.
NGC's financial stability is bolstered by a robust equity base and a favorable capital structure, with significant reliance on GoP-relent foreign loans. The company manages its working capital efficiently, mitigating exposure to circular debt.
A Rating Watch has been placed in light of the GoP's plan to restructure the industry by unbundling NTDC into three entities, including NGC. This transition is expected to preserve NGC's major revenue streams, supporting the current ratings. The Rating Watch will enable close monitoring of the financial and operational impacts as the roles of the new entities are defined.
The ratings remain contingent on NGC's ability to maintain financial stability, complete transmission projects on schedule, and navigate operational challenges. Approval of the revised tariff is crucial for regulatory clarity and stable cash flow. NGC's operational efficiency and strategic role in the national transmission network continue to be key determinants of its ratings.