PACRA Maintains entity Ratings of Lucky Electric Power Company Limited

Lucky Electric Power Company Limited ("LEPCL" or "the Company") has established a 1x660MW (gross) coal-fired power plant, achieving Commercial Operations Date (COD) in March 2022 and supplying electricity to the national grid. The plant primarily runs on coal, with a supply agreement with Sindh Engro Coal Mining Company (SECMC). SECMC’s Block-II (Phase III) operations are now expected to commence in December 2025. The Company also sources imported coal from reputable suppliers for current operations. During 6MFY25, the plant generated 715.6 GWh of electricity, contributing to a topline of approximately PKR 41 billion. The Company recorded a bottom-line profit of around PKR 10.3 billion in the same period. In comparison, FY24 generation stood at 1,688 GWh with revenue of PKR 90.95 billion and a net profit of PKR 19.53 billion. The lower generation was primarily driven by reduced demand, which in turn impacted working capital utilization. Consequently, the Company's reliance on external financing was lower, reflected in the issuance of a single Sukuk of PKR 5 billion in FY25, compared to PKR 25 billion in Sukuk issuances in the previous year. Operational stability is ensured through M/s Harbin Electric International Co., Ltd. - P.R. China (HEI), which took over O&M in March 2023. The Company remains focused on uninterrupted plant operations. LEPCL has secured short-term financing facilities totaling approximately PKR 24,155 million, with a utilization rate of 70% as of December 2024. As of December 2024, cumulative short-term borrowings stand at around PKR 21,955 million. The financial strength and extensive experience of the sponsor, Lucky Cement, in the energy sector are key positive factors supporting the Company's credit profile. LEPCL continues to make timely payments on its project debt, with explicit liquidity support from the sponsor, which is a critical consideration in the assigned ratings. The Company's offtake agreement is with the Central Power Purchasing Agency (CPPA-G), ensuring capacity payments as per contractual availability, even in the absence of a purchase order. Furthermore, the Government of Pakistan has provided a payment guarantee against CPPA-G dues, enhancing the Company’s financial stability.
The management’s ability along with the explicit support from the sponsor to effectively manage operational risks provides comfort to assigned ratings. Trend in operational profitability would bode well for rating. External factors such as any adverse changes in the regulatory framework may impact the ratings

About the Entity
Lucky Electric Power Company Limited, incorporated in Pakistan on June 13, 2014 as public unlisted company at Port Qasim, Karachi, Sindh. The capital structure comprises 25% equity and debt financing constitutes 75% of the project cost; ~USD 895mln, financed from local and foreign financial institutions. Local currency facilities have been obtained from multiple consortium of banks aggregating to PKR 65.9bln and have a 10 year tenure starting June 2022 and to be paid in 40 quarterly installments. The foreign facility is USD 210mln. Lucky Cement Limited owns 100% shareholding of Lucky Electric Power Company Limited. Lucky Cement Limited stands as the flagship company of Yunus Brothers Group. The Company’s Board comprises eight directors, including the CEO, out of which three directors are independent, ensuring effective governance and oversight. Mr. Muhammad Ali Tabba, the Chairman, has been associated with the Group in different capacities for nearly three decades and is currently chairing the Board with his visionary leadership and vast experience