Karachi, The Pakistan Water and Power Development Authority (WAPDA) has successfully secured financing for its ambitious Dasu Hydropower Project through the issuance of the second tranche of Sukuk, reinforcing its commitment to enhancing Pakistan's hydropower capacity.
According to The Pakistan Credit Rating Agency Limited (PACRA), the issuance of WAPDA Dasu Sukuk-B, valued at PKR 6,352.94 million on July 29, 2021, is a strategic move to finance Stage-I of the Dasu Hydropower Project. This project, set to be Pakistan's second-largest hydel project, is located in Dasu Kohistan, Khyber Pakhtunkhwa, approximately 350 km from Islamabad. Initiated in 2017, the project is expected to be completed in May 2027 and will be executed in two stages. The first stage, with a capacity of 2,160MW, will contribute 12,220 GWh to the total projected annual energy output of 21,485 GWh.
WAPDA's comprehensive funding strategy for the project involves a blend of internally generated cash and borrowing, including local and foreign long-term loans, as well as both Islamic and conventional bond issuances. Approximately 85% of the project's financing comes from these borrowings, with the remainder from WAPDA's own funds. Currently, the project has achieved about 18.6% physical completion and 48.8% financial progress.
The Dasu Sukuk-B is a significant component of a larger PKR 144 billion local financing package from a local bank syndicate, with a tenure of 15 years. The Sukuk, which will be redeemed through twenty equal semi-annual installments, carries a profit rate of 6MK + 1.45% per annum, paid semi-annually. The Government of Pakistan guarantees the Sukuk, ensuring the payment of the outstanding amount and the profit component.
In addition to its financing endeavors, WAPDA has reported a strong financial performance, with a topline of approximately PKR 37.7 billion and a bottom line of about PKR 12.9 billion during the first half of the fiscal year 2023. With its current electricity generation capacity of 28,903 GWh in FY22, WAPDA aims to bolster its output by around 8,990MW over the next six years through new hydel projects.
About WAPDA: Established by the WAPDA Act 1958, the Pakistan Water and Power Development Authority oversees the development and maintenance of the nation's water and power resources, currently managing 22 projects with a total hydropower generation capacity of 9,389MW.