Karachi: In a recent assessment, VIS Credit Rating Company Limited has upgraded the credit ratings of Quaid-e-Azam Thermal Power (Private) Limited to ‘AA+/A-1+’ from ‘AA/A-1’, citing strong protection factors and the highest likelihood of timely debt repayment.

According to VIS Credit Rating Company Limited, the upgrade reflects Quaid-e-Azam Thermal Power’s robust financial and operational framework, supported by a long-term Power Purchase Agreement (PPA) with Central Power Purchasing Agency (Guarantee) Limited. This agreement, coupled with a comprehensive gas supply arrangement, ensures stable revenue streams and mitigates risks related to fuel supply and pricing.

The company, wholly owned by the Government of Punjab, operates a 1,163 MW RLNG-based power plant in Bhikki, Sheikhupura. The PPA includes provisions that guarantee capacity payments even during periods when the plant does not supply power, further stabilizing its financial outlook. Additionally, the contract allows the company to suspend operations while continuing to receive payments if receivables from its primary customer remain outstanding for extended periods.

The financial indicators of Quaid-e-Azam Thermal Power show stable profitability and a conservative capital structure, which have contributed to the positive rating action. The company’s approach to managing its financial obligations and ensuring timely debt repayments also supports the upgraded ratings, with the outlook for the ratings being stable.