PACRA Maintains the rating of WAPDA Dasu TFC-D

The assigned rating incorporates The Pakistan Water and Power Development Authority's ("WAPDA") high strategic importance as Pakistan's sole platform for developing water and hydropower resources. Most of WAPDA’s projects are funded by the Government of Pakistan ("GoP" or the "Government") through grants, re-lending, and loans, along with a favorable tariff scheme that covers operating costs and ensures a reasonable return on investment. In Sep 2023, WAPDA issued the fouth tranche of its TFC, valued at PKR 10,000mln to finance Stage-I of the Dasu Hydropower Project ("Dasu" or the "Project"). Located on the Indus River in Dasu Kohistan, Khyber Pakhtunkhwa, approximately 350 km from Islamabad, Dasu will become Pakistan’s second-largest hydropower project. The Project, launched in 2017 and expected to be completed by May 2027, will be developed in two stages. With a total capacity of 4,320 MW (2,160 MW in Stage-I), Dasu is projected to generate 21,485 GWh annually (12,220 GWh from Stage-I). Stage-I includes constructing a hydraulic structure on the Indus and installing underground power facilities. The Project has achieved approximately 22.36% physical progress and 63.78% financial progress. In FY24, the entire 5,031 acres of land required for the project was successfully acquired. Additional key milestones achieved during this period include: i) Upstream Starter Dam (up to El. 798 m) ii) Completion of Project Colony Phase-A iii) Excavation of 765 KVA Switchyard iv) Completion of left bank traffic tunnel (LBTT). 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 assigned rating of TFC incorporates an unconditional and irrevocable guarantee by the Government. The guarantee covers the payment of the total outstanding amount of the TFC and the related profit component. The GoP would pay the entire called amount immediately upon receiving a demand notice from the issuing 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 deposits 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. During FY25 excavations of Dam Abutments on right and left Banks of river, 132KV transmission line from Dubair to Dasu, main crushing and batching plants at Sigloo area, and excavations of power house and transformer caverns are planned.
Given its crucial role and the Government’s strong support and direct oversight, full ownership and control are expected to remain with the government in the coming years.

About the Entity
WAPDA, an autonomous body, was established by the WAPDA Act of 1958 to develop and maintain Pakistan's water and power resources. The total generation capacity of WAPDA is 9389MW.

About the Instrument
WAPDA has issued a rated, secured, privately placed WAPDA Dasu TFC-D ("TFC") of PKR 10,000mln in Sep-23. 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 555.5mln which commenced from Nov-23. The Company has paid the markup amounting PKR 2,421mln and total principal amounting PKR 1,667mln to date.