Saif Power Limited ("SPL" or "the Company") was incorporated in Pakistan on November 11, 2004, as a public limited company under the repealed Companies Ordinance, 1984 (now replaced by the Companies Act, 2017), and began operations on April 30, 2010. The Company’s shares are listed on the Pakistan Stock Exchange Limited. SPL's primary activities include owning, operating, and maintaining a combined-cycle power plant with a nameplate capacity of 225 MW (ISO), and selling electricity to the Central Power Purchasing Agency Guarantee Limited (CPPA-G). On February 11, 2021, the Company amended its Implementation Agreement, which resulted in the replacement of the National Transmission and Dispatch Company (NTDC) with CPPA-G as the power purchaser. The plant, located in Qadarabad, District Sahiwal, primarily operates on RLNG supplied by Sui Northern Gas Pipelines Limited (SNGPL), with High-Speed Diesel (HSD) as the secondary fuel, provided by Shell Pakistan Limited.

Saif Power Limited derives its primary revenue from the generation tariff received from Central Power Purchasing Agency Guarantee Limited (CPPA-G), comprising the Energy Purchase Price (EPP) and Capacity Purchase Price (CPP). The Company’s levelized tariff stands at PKR 5.61 per kWh when operating on gas and PKR 15.52 per kWh when operating on High-Speed Diesel (HSD). Pursuant to the new agreement effective November 2024, the IPP has transitioned to a Hybrid Take-and-Pay Model, under which it is entitled to 35% of the Return on Equity (ROE) and Return on Equity During Construction (ROEDC) components. In cases where the Dispatched and Delivered Net Electrical Output (NEO) exceeds 35% of the total contracted capacity (in kWh terms), the Company is entitled to receive ROE and ROEDC on the actual NEO exceeding the 35% threshold. Furthermore, the insurance component has been revised and capped at 0.9% of the allowed EPC cost, compared to the previous cap of 1.35%.

The allowed return on both local and foreign equity has been set at 17%, without any dollar indexation. Under the revised agreement, the foreign component of the Return on Equity (ROE) has been substantially reduced.

The principal sponsor of SPL is Saif Holding Limited, which owns ~47% of the Company’s shareholding. Orastar Limited holds ~17%, while various financial institutions collectively account for ~8%. The remaining ~28% of the shares are held by the general public.

The stability of the Independent Power Producers (IPPs) is primarily supported by long-term contractual agreements with the power purchaser, which provide predictable revenue streams and mitigate operational and market risks. Additionally, the sustained involvement of the sponsors with the Saif Group enhances investor confidence and underpins the Company’s overall financial resilience and credit profile.

Saif Group is a prominent industrial and services conglomerate in Pakistan, with diversified operations spanning oil and gas exploration, power generation, textile manufacturing, real estate development, healthcare services, information technology, software development, and environmental management. Saif Holding Limited plays a key role in overseeing and assessing the business and investment activities of the Saif Group on a regular basis. Additionally, it provides consultancy services and other related support to the Group's associated companies, helping to guide and enhance their strategic initiatives.

The sponsors demonstrate strong financial strength, underpinned by their involvement in a broad portfolio of profitable and diversified businesses across multiple sectors. This diversification reduces concentration risk while enhancing overall financial stability and resilience. Their well-established business platforms and consistent performance across industries further strengthen their financial profile, positioning them to sustain long-term growth and navigate market fluctuations effectively.

Saif Power Limited is governed by a seven-member Board of Directors (BoD), excluding the Chief Executive Officer (CEO). The Board comprises seven members representing the Saif family, alongside two independent directors, providing a balance between family influence and external oversight. This leadership structure reflects a combination of familial representation and independent governance, supporting a balanced and effective decision-making framework.

Mr. Javed Saifullah Khan serves as the Chairman of the Board of Saif Power Limited. A globally recognized business leader, Mr. Khan brings extensive expertise in launching new projects in emerging markets. He has held the position of Chairman at Saif Group for over three decades and also chairs the Boards of Saif Textile Mills Limited, Kohat Textile Mills Limited, and Saif Energy Limited. Mr. Khan is credited with the successful launch of Mobilink (now Jazz), the first GSM cellular company in the subcontinent, in a joint venture with Motorola. Under his leadership, Jazz has become the leading cellular company in Pakistan. He was the inaugural Chairman of Pakistan Mobile Communications Limited (PMCL) and served in that capacity until 2003, before continuing as a Board Member until 2014. In addition to his corporate achievements, Mr. Khan has played an influential role in various industry bodies. He served as Chairman of the All Pakistan Textile Mills Association (APTMA) for two terms, and as a Board Member of Pakistan International Airlines (PIA), Habib Bank Limited, and the Board of Investment of the Government of Pakistan. The other non-executive directors on the Board include: i) Mr. Osman Saifullah Khan, ii) Mr. Humayun Saifullah Khan, iii) Mr. Assad Saifullah Khan and iv) Mr. Asif Saifullah Khan. The independent directors are: i) Mrs. Saima Akbar Khattak and ii) Mr. Khalid Siddiq Tirmizey. The Board members possess a strong combination of qualifications and experience, with each member bringing valuable expertise to their respective roles, thus contributing to a robust and well-rounded governance structure for the Company.

The Board of Directors has established two key committees: the Audit Committee (AC) and the Human Resource & Remuneration Committee (HR & R Committee). The participation of all Board members in Board meetings has been consistently satisfactory, ensuring active involvement in decision-making processes. Mr. Khalid Siddiq Tirmizey serves as the Chairman of the Audit Committee, while Ms. Saima Akbar Khattak is the Chairperson of the Human Resource & Remuneration Committee. These committees play a vital role in overseeing the respective areas of financial oversight and human resource management, contributing to the overall governance and strategic direction of the Company.

The Company maintains a fully operational website that provides stakeholders with timely and relevant financial information. To ensure financial transparency and strong corporate governance, an independent Internal Audit Department has been established, reporting its findings directly to the Board of Directors. The external audit for the year ended December 31, 2024 was conducted by M/s GT Anjum Rahman & Co., Chartered Accountants, who issued an unqualified opinion on the Company’s financial statements. M/s KPMG Taseer Hadi & Co., Chartered Accountants, have been appointed as the Company’s external auditors for the year ending December 31, 2025.

The management of SPL plays an active role in maintaining relationships with lenders, NEPRA, the power purchaser, and the operations and maintenance (O&M) operator, while also overseeing legal, technical, and commercial matters. A substantial portion of the Company’s workforce is focused on finance and related functions, reflecting the outsourcing of plant operations and maintenance to General Electric under a long-term O&M contract. This operating structure enables SPL to concentrate on financial management, regulatory coordination, and strategic oversight, while leveraging General Electric’s technical expertise for efficient plant operations.

Mr. Jehangir Saifullah Khan has been serving as the Acting Chief Executive Officer of SPL and brings over two decades of diversified business experience. He joined the Saif Group after graduating from the University of Virginia, USA. He initially managed the Group’s textile operations for three years, followed by his association with Saif Telecom, where he played a key role in the development and financing of Pakistan’s first undersea fiber optic cable system, TW-1. Transworld, the operating entity, is the only operator in Pakistan to own a 1,300-km submarine cable system and is also a consortium member of the 20,000-km SEA-ME-WE 5 cable system, which connects Pakistan with Asia Pacific, the Middle East, and Europe. The broader management team includes Mr. Muhammad Shakeel as Chief Financial Officer (CFO), Mr. shahid Malik as Deputy CFO, Mr. Waseem Ullah as Company Secretary, Mr. Muhammad Awais Bakhtiyar as Head of Internal Audit and Mr. Altaf Hussain as General Manager of the Power Plant. Collectively, the management team possesses strong sectoral and functional expertise, supporting effective financial oversight, operational management, and regulatory compliance.

SPL’s strategic leadership has streamlined decision-making, creating a more structured and efficient process. This disciplined approach enables the organization to operate seamlessly, respond effectively to evolving conditions, and consistently achieve strong performance, driving sustainable growth and long-term success for the Company.

The Company has established a Management Information System (MIS) that enables management to effectively monitor and track operational activities while ensuring seamless communication with the O&M operator. To strengthen financial transparency, the Company has also instituted an internal audit function that reports directly to the Audit Committee, providing an enhanced level of oversight and accountability across its operations.

SPL's primary source of revenue is derived from the sale of electricity to the power purchaser, CPPA-G. The obligations of CPPA-G are guaranteed by the Government of Pakistan, providing a layer of security for the Company. Additionally, a stable revenue stream is further supported by the minimum guaranteed capacity charge, which is a component of the tariff that the Company receives regardless of the actual electricity production. The term of the Power Purchase Agreement (PPA) is set for 30 years, ensuring long-term revenue stability for SPL.

General Electric International, the O&M operator for Saif Power, is responsible for ensuring that the plant consistently meets the required performance benchmarks. Their role includes maintaining the plant’s efficiency and operational standards to ensure it operates at optimal levels, adhering to minimum performance criteria as outlined in the agreement.

SNGPL supplies the RLNG gas required for the operation of the facility, while HSD, used as a backup fuel, is sourced from Shell Pakistan. The risk associated with fuel resources is considered low due to the established agreements with both SNGPL and Shell Pakistan, ensuring a reliable and uninterrupted supply of fuel for the plant. These long-term agreements provide a stable fuel supply, mitigating the potential risk of disruptions and supporting the plant's consistent operation.

SPL maintains comprehensive insurance coverage to safeguard its operations and assets. This coverage ensures protection against various risks, including operational, financial, and physical hazards, providing the Company with a secure foundation to mitigate potential disruptions. The insurance framework is designed to support business continuity and safeguard against unforeseen events, contributing to the overall risk management strategy of the Company.

Pakistan's power sector has transitioned from capacity shortages to surplus generation with declining utilization, as demand remains subdued amid elevated tariffs and macroeconomic pressures; the energy mix continues to be dominated by thermal sources with heavy reliance on imported fuels, exposing the sector to supply chain risks such as fuel price volatility, foreign exchange constraints, and logistical disruptions, while the rapid expansion of distributed solar and net-metering is eroding grid demand and amplifying the burden of fixed capacity payments; in response, reforms including the hybrid take-and-pay model are being explored to better align capacity payments with actual offtake, though persistent circular debt, driven by distribution inefficiencies and tariff gaps, continues to exert significant pressure on sector liquidity.

SPL generated ~195 GWh of electricity during 9MCY25, reflecting a ~48% year-on-year increase compared to ~132 GWh in the same period last year. The increase in output was driven by improved plant utilization following the revision of its Power Purchase Agreement, under which capacity charges were significantly reduced. The lower fixed-cost burden has incentivized greater dispatch and enhanced overall operational efficiency. This shift improves asset utilization and supports a more performance-linked revenue profile.

The plant has consistently maintained an average availability in line with the agreed-upon performance parameters. The dispatch level increased to 14.53% in 9MCY25 from 9.88% in the corresponding period of last year. Capacity made available remained almost consistent at 1,345 GWh in 9MCY25 against 1,344 GWh in 9MCY24.

SPL project capital structure consists of 24% equity and 76% debt. The debt portion, representing 76% of the project cost, was financed through a syndicated term finance loan. The total loan size amounted to PKR 12,907 million, with an interest rate set at 3-month KIBOR plus 3% per annum. The repayment period for the loan was structured over ten years, with forty consecutive quarterly installments beginning in June 2010. However, in April 2021, the Company successfully repaid the entire outstanding debt, clearing its financial obligations.

Circular debt continues to weigh on Pakistan’s power sector, requiring Independent Power Producers (IPPs) to rely on short-term borrowings (STB) to manage working capital gaps arising from delayed receivables. The Company maintains an STB limit of PKR 17 billion, of which only ~20% (~PKR 3.4 billion) is currently utilized, reflecting a comfortable liquidity position with substantial headroom of ~PKR 12.6 billion. This moderate utilization underscores limited reliance on short-term leverage, while providing flexibility to absorb receivable delays, meet operational and fuel procurement requirements, and service financial obligations without significant refinancing pressure. Overall, the available undrawn capacity supports a stable and manageable liquidity profile despite ongoing sectoral challenges.

The Company continues to efficiently manage its working capital primarily through internal cash flow generation, covering key requirements such as gas and fuel procurement and overdue receivables. As of 9MCY25, total receivables declined sharply to ~PKR 1,215 million from ~PKR 8,250 million in the same period last year, reflecting improved receipts from the CPPA-G. Receivable days dropped to ~149 days from ~293 days, while gross working capital days fell to ~163 days from ~306 days, indicating a more streamlined asset utilization. Trade payable days also shortened to ~21 days from ~36 days, further tightening the cash conversion cycle. Overall, these improvements reduced the net working capital cycle to ~142 days from ~270 days in the prior comparable period. As of September 2025, the Company had utilized ~33% of its available working capital lines totaling ~PKR 11.66 billion, maintaining adequate liquidity headroom.

During 9MCY25, the Company generated Free Cash Flow from Operations (FCFO) of ~PKR 519 million, compared to ~PKR 2,604 million in the same period last year. The EBITDA to finance cost ratio declined to ~1.0x from ~2.5x, while the FCFO to finance cost ratio fell to ~0.8x from ~2.5x in 9MCY24. These declines reflect the impact of lower cash generation on the Company’s ability to cover its financing obligations, highlighting increased pressure on liquidity and the importance of maintaining disciplined cash management.

As of 9MCY25, SPL’s short-term borrowings declined sharply to ~PKR 3,399 million, down from ~PKR 7,844 million in the same period last year, now representing ~98.2% of total borrowings. The Company’s leverage ratio improved to ~28.9x from ~38.9x, reflecting more disciplined debt management. Interest payable days also fell markedly to ~56.9 days from ~348.1 days, demonstrating enhanced efficiency in debt servicing and a significant strengthening of the Company’s short-term liquidity position.