The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Atif Chaudhry

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA assigns Preliminary rating to WAPDA Dasu TFC-D | PKR 10bln

Rating Type Debt Instrument
(25-Jul-23 )
Action Preliminary
Long Term AAA
Short Term -
Outlook Stable
Rating Watch -

The Pakistan Water and Power Development Authority ("WAPDA") is in process of issuing the 4th tranche of TFC worth PKR 10bln in July-23. WAPDA will utilize this amount to partially finance the construction of the Dasu hydropower project Stage-I ("the Project", "Dasu"). Dasu, once completed would become the second-largest hydel project in Pakistan. Dasu is a run of river project on the Indus River located in Dasu Kohistan, Khyber Pakhtunkhwa about 350 KM from Islamabad. The project started in 2017 and is expected to be completed in May'27. The project will be completed in two stages, the installed capacity would be 4,320MW (stage-I 2,160MW) and the total annual energy of 21,485 GWh will be produced (Stage-I 12,220 GWh). Stage -I project includes the construction of a hydraulic structure on the Indus River and underground power generation facilities, out of the total land required (5038 acres) for the project 4907 acres have been acquired. The Project would be financed through a mix of WAPDA internally generated cash (15%) and borrowing (85%) i) Long-term (local & foreign) ii) Bonds Issuance (Islamic & Conventional). The current Series D TFC is part of the local financing facility package of PKR 144 bln availed from the local syndicate bank for a period of 15 years, whereby PKR 35.2 bln is to be raised in form of GOP guarantee backed TFCs in five no. tranches. WAPDA has currently issued the three tranches (A, B, and C) of TFC by aggregate amount of ~PKR 18.471bln and remaining available limit ~PKR 6.729bln will be issued in the form of TFC E. The assigned rating of TFC incorporates an unconditional and irrevocable guarantee by the Government of Pakistan (GoP). The guarantee is covering the payment of the total outstanding amount of the TFC and the related profit component. GoP would pay the entire called amount immediately upon receiving a demand notice from the issue agent. Additionally, WAPDA has maintained a Debt Payment Account (DPA) with the Facility Agent which will be held under an exclusive lien in favor of the Issue agent. During each month, WAPDA shall deposit an amount equivalent to 1/6th of the upcoming Installment into the DPA, so that the aggregate amount available in the DPA on the upcoming Installment Date is equal to the relevant upcoming Installment. WAPDA has generated a topline of ~PKR 37.7 bln (6MFY22: ~PKR 48.8bln) and a bottom line of ~PKR 12.9 bln during 6MFY23 (6MFY22: ~PKR 8.8bln). WAPDA generated 28,903GWh electricity in FY22. WAPDA expects to generate an additional ~8,990MW by the completion of new hydel projects in the next six years.

About the Entity
The Pakistan Water and Power Development Authority (WAPDA), was established through an act of parliament in February 1958 (WAPDA Act 1958) for the development and maintenance of water and power resources. WAPDA has 22 projects with a total hydel generation capacity of 9,389MW.

About the Instrument
WAPDA is in the process of issuing a rated, secured, privately placed WAPDA Dasu TFC-D ("TFC") of PKR 10,000mln in July-23 to partially finance stage-1 of Dasu Hydropower Project. The TFC has a tenor of 9 years and carries a profit rate of 6MK + 1.45% p.a to be paid semi-annually in arrears. TFC will redeem after eighteen equal semi-annual installments amounting to PKR 555mln which will commence from Nov-23.

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.