PACRA Maintains Entity Ratings of ThalNova Power Thar (Pvt) Limited

ThalNova Power Thar (Pvt.) Limited (TNPTL or "the Company") operates a 330MW mine-mouth lignite-fired power plant at Block II, Thar Coalfield, District Tharparkar, Sindh, forming part of energy projects under the China-Pakistan Economic Corridor (CPEC). As of FY26, Pakistan's power sector generated 128,700 GWh, up 1.2% YoY, supported by a total installed capacity of 49,651 MW, up 8.5% from 45,782 MW a year earlier. Clean sources - hydel, nuclear, and renewables combined - led the mix, accounting for 50.8% of installed capacity (up from 43.3% a year earlier), while thermal's share fell to 49.2% from 56.7%, with coal-based generation contributing 22.9% of total generation (up from 19.4% in FY25), underscoring its growing role in ensuring stable base-load generation. Indigenous Thar coal has emerged as a key pillar of energy security, offering cost-effective and reliable power compared to imported fuels. Imported coal generation rose sharply, as reduced RLNG availability and elevated LNG costs pushed dispatch toward coal. TNPTL has secured its fuel requirements through a 30-year Coal Supply Agreement with Sindh Engro Coal Mining Company, signed on May 13, 2017, for the annual procurement of around 1.9 MTPA of lignite coal. The arrangement ensures fuel cost stability and entails minimal resource risk throughout the project's life, supported by liquidated damages provisions under the agreement. The plant continues to be dispatched on priority by the power purchaser, CPPA-G, due to its low-cost generation profile. Leveraging its dispatch priority, the plant generated 1,824 GWh in FY26 (FY25: 1,768 GWh) at a load factor of 69.0% (FY25: 67.0%), while maintaining strong operational performance benchmarks.Financially, receivables from CPPA-G stood at PKR 16,616mln as of June 30, 2026, continuing to weigh on liquidity, with Gross Working Capital days rising to 118 days in FY26 (FY25: 109 days; FY24: 74 days). The requirement continues to be largely managed through internally generated cash flows, with net cash from operations of PKR 18,728mln in FY26, while short-term borrowings were reduced to PKR 1,500mln (FY25: PKR 3,000mln). Strong cash generation has also supported timely debt repayments, with PKR 7,173mln of long-term loans repaid during the year, bringing leverage down to 59.9% in FY26 from 62.8% in FY25. The Company has also paid a dividend of PKR 12,862mln (Rs 5.49 per share) in FY26, with a further interim dividend of Rs 3.25 per share (PKR 7,614mln) declared in July 2026. The Company is also disputing USD 31mln HVDC charges linked to COD delays; management, supported by legal counsel, does not expect any financial liability to arise.Following the ESG practices according to the HUBCO’s report, environmental standards are taken care of at TNPTL where all ash yards are lined with geo-membranes to prevent leaching. Further, in reference to HUBCO’s report they are actively pursuing fly ash reuse in cement, roadworks, and recycling partnerships, which are expected to reduce waste management costs.
TNPTL continues to demonstrate strong operational performance, underpinned by consistent achievement of efficiency and availability benchmarks that support its favorable merit order position. Sustained cash flow generation and timely servicing of project debt remain important for maintaining the Company’s credit strength. Meanwhile, developments in the power sector, including tariff adjustments, CPPA-G payment trends and circular debt, remain relevant. Any regulatory measures introduced under ongoing sector reforms may affect the Company’s ratings.

About the Entity
TNPTL is incorporated on April 18, 2016. HUBCO holds 38.3% ownership and management control through Hub Power Holdings Limited (HPHL), while the remaining shareholding is split among Thal Power (26.0%), Nova Powergen (24.7%), CMEC ThalNova Power Investments (10.0%), and Descon Engineering (1.0%). The plant achieved COD on February 17, 2023, operates under long-term Power Purchase and Coal Supply Agreements. Mr. Amjad Ali Raja, appointed CEO in July 2024, has over 22 years of sector experience and reports to a Board of directors