The Pakistan Credit Rating Agency Limited
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Uswa Sikandar

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PACRA maintains Entity Ratings of National Transmission & Despatch Company Limited

Rating Type Entity
(11-Aug-23 )
(13-Aug-22 )
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 43,775 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 9MFY 2022-23, NTDC received a total of 97,106 GWh of energy and delivered 94,700 GWh of energy through CDPs all over Pakistan. T&T losses expressed as a percentage of energy received by NTDC were 2.477% for 9MFY 2022-23. 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 including the completion of 500kV Thar-Matiari Transmission line to evacuate power from coal-based power plants in Thar. 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, company’s in-house working capital management is reflected in 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 is in the process of implementing ERP System that aims at achieving business automation in the Company.
Effective management and timely completion of upcoming projects as well as 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 was reconstituted by the federal government of Pakistan in June 23 and now comprises of thirteen experienced professionals including seven independent directors and five non-executive directors - representatives from Ministry of Energy (Power Division), Planning Commission, PPIB and CPPA-G. The Chairman, Mr. Khalid Ishaq is serving as Advocate General Punjab while Engr. Dr. Rana Abdul Jabbar Khan is the serving 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.