KARACHI:VIS Credit Rating Company Limited has reaffirmed the entity ratings of Thal Power (Private) Limited at double A /A-One plus.
The long-term rating of ‘AA’ signifies high credit quality and strong protection factors. Risk is modest but may vary slightly from time to time because of economic conditions. The short-term rating of ‘A-1+’ signifies highest certainty of timely payment; short term liquidity, including internal operating factors and /or access to alternative sources of funds, is outstanding and safety is just below risk free Government of Pakistan’s short-term obligations. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on Dec. 29, 2020, said release on Monday.
TPPL is as a wholly-owned subsidiary of Thal Limited (THAL); the assigned ratings derive strength from the strong sponsor profile. THAL is a diversified national conglomerate engaged in manufacturing of engineering products, jute products, paper sacks and laminated products; it also holds investments in real estate and energy sectors. TPPL was setup by THAL as a special entity for the purpose of routing its investment in ThalNova Power Thar (Private) Limited (ThalNova). Thal Ltd. owns 26% ordinary shareholding in ThalNova through TPPL.
Thal Nova is a joint venture between TPPL, Nova Powergen Ltd (subsidiary of Novatex Ltd), CMEC ThalNova Power Investments Limited (a subsidiary of China Machinery Engineering Corporation) and Hub Power Company Limited to set up a 330 MW mine mouth coal-fired power generation plant located at Thar, Sindh.
This power plant will be run on indigenous coal extracted from the mine operated by Sindh Engro Coal Mining Company Limited. The Power Plant is listed under Priority Projects under the China Pakistan Economic Corridor (CPEC). ThalNova achieved its Financial Close on September 30, 2020. The Project is expected to come online in 2022.
THAL has undertaken to invest Pakistan Rupees equivalent of dollars 34.3 million in the project and of this, dollars 13 million has already been injected. The balance commitment of the investment is dollars 21.3 million in Pakistan Rupees equivalent for which a stand-by letter of credit is in place,