The Pakistan Credit Rating Agency Limited
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Anam Waqas Ghayour

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PACRA maintains Entity Ratings of National Transmission & Despatch Company Limited

Rating Type Entity
(13-Aug-22 )
(13-Aug-21 )
Action Maintain Maintain
Long Term AA+ AA+
Short Term A1+ A1+
Outlook Stable Stable
Rating Watch - -

The ratings reflect National Transmission and Despatch Company’s (NTDC) “the Company” ownership structure dominantly owned by the Government of Pakistan (GoP). The Company is of strategic importance to Pakistan as being an autonomous power transmission utility. It is mandated to construct, maintain and operate an integrated network of 220 kV, 500 kV, and above transmission lines and grid stations to evacuate power from an installed generation capacity of over 40,156 MW. NTDC’s low business risk emanates from its leading market position and strong hold on the transmission system in terms of its technical and business expertise. Moreover, the Company’s operational expenses being part of its tariff reflect positively on its performance and business risk profile. During FY 2021-22, NTDC received a total of 140,347 GWh of energy and delivered 136,675 GWh of energy through CDPs all over Pakistan. T&T losses expressed as a percentage of energy received by NTDC were 2.62% for FY 2021-22. The Company's transmission losses are within the limits allowed by NEPRA.. The Company has undertaken and completed multiple projects that will improve transmission efficiency by managing the load. Additionally, the recent CoD of Pak Matiari-Lahore Transmission Company project will further allow the effective management of load for transmission of electricity from Sindh to Punjab. With its extensive transmission network spread all over Pakistan, NTDC dominates the electricity transmission industry. Ratings also take into account the Company’s moderate financial risk emanating from sizable equity, an adequate capital structure that comprises mainly of foreign loans relent in Pak Rupee to NTDC and borrowing from the local banks. Furthermore, in-house working capital management is reflected by strong internal cash generation and constructive management of circular debt by adjusting its receivables with repayments due against foreign loans relent to NTDC by GoP. The Company has recently undertaken the project of implementing ERP System that aims at achieving business automation in the Company.
Effective management and completion of upcoming projects will further reduce T&T losses and resultantly, will further strengthen the rating. Furthermore, consistency in financial profile and risk matrices remains critical for the ratings. Meanwhile, reconciliation of outstanding adjustments regarding Business Transfer Agreements and sustained competitive positioning are also imperative for ratings.

About the Entity
National Transmission and Despatch Company was incorporated as a Public Limited Company on Nov 06, 1998, under the Companies Ordinance 1984 (now Companies Act 2017), with its Head Office in Lahore. After having a Certificate for Commencement of Business, NTDC started its commercial operations on March 01, 1999. NEPRA granted a Transmission License to NTDC in December 2002 to engage in the exclusive transmission business for a term of thirty (30) years. NTDC's first tariff was determined by NEPRA in April, 2004. The board of NTDC comprises of eleven experienced professionals including five independent directors and five non-executive directors - representatives from Ministry of Energy (Power Division), Ministry of Planning, Development & Special Initiatives, PPIB and CPPA-G. Engr. Dr. Rana Abdul Jabbar Khan is the acting Managing Director of NTDC.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.