Lucky Electric Power Company Limited ("the Company" or "Lucky Electric") has successfully commissioned a 1x660MW (gross) local coal-fired supercritical power plant at Port Qasim, Karachi, Sindh. The project, developed on a Build-Own-Operate (“BOO”) basis, was established at a total cost of USD 895 million, financed with a debt-to-equity ratio of 75:25. In a significant development, the Company has achieved full Shariah compliance by meeting all necessary requirements. Consequently, the Securities and Exchange Commission of Pakistan (SECP) issued the Shariah Compliance Certificate to the Company on March 3, 2025.

The Company's tariff structure comprises two primary components: Capacity Payments and Energy Payments. Energy Payments are further broken down into variable costs and fixed fuel costs. A key feature of the tariff agreement ensures revenue stability: if the plant achieves its contracted availability, the Company is entitled to receive both Capacity Payments and fixed fuel costs, even in the absence of a purchase order from CPPA-G. The tariff control period is set for a duration of 30 years, providing long-term revenue visibility.

The Company's financial framework, as approved by NEPRA, includes an agreed-upon Return on Equity (ROE) expressed in PKR/kWh. This return is set at 29.5% for operations using local coal and 27.2% for operations utilizing imported coal.

Lucky Cement Limited owns 100% shareholding of Lucky Electric, incorporated in Pakistan on June 13, 2014, as a public unlisted company. The registered office of the Company is situated at 6-A, Muhammad Ali Housing Society, Karachi, Sindh.

Lucky Electric Power Company Limited (LEPCL) maintains a strong and stable position under the ownership of the Yunus Brothers Group (YBG), one of Pakistan's most established and diversified conglomerates. As a subsidiary of Lucky Cement Limited, LEPCL holds a strategic position within the group, benefiting from its financial strength, operational expertise, and long-term commitment to the energy sector. The sponsor has a proven track record of successful operations across multiple industries, ensuring sustained support and strategic oversight. Furthermore, there is no intent to dilute the shareholding in the Company, reaffirming LEPCL's long-term stability and growth trajectory.

Yunus Brothers Group (YBG) exhibits strong business acumen through its diverse portfolio in cement, textiles, real estate, power, chemicals, pharmaceuticals, food, and automotive. With a proven track record of strategic investments and financial strength, YBG drives sustainable growth across industries. Lucky Electric Power Company benefits from this solid foundation, leveraging the Group's expertise, operational excellence, and long-term vision.

Lucky Electric Power Company benefits from strong financial stability, backed by its parent company, Lucky Cement Limited, a market leader in Pakistan's industrial sector. This strong financial foundation ensures LEPCL's sustainable operations, long-term growth, and resilience in the power industry. Additionally, the explicit financial support from the Yunus Brothers Group (YBG) further strengthens LEPCL's position, as the sponsors have well-diversified and profitable businesses across multiple industries.

The Board of Directors is primarily dominated by the sponsor's representatives. The Board currently comprises eight members, including the Chief Executive Officer. Out of these, three members serve as Independent Directors, ensuring a level of independent oversight within the governance framework.

Mr. Muhammad Ali Tabba, the Chairman, has been associated with the Group in different capacities for nearly three decades and currently chairs the Board with his visionary leadership and vast experience. All Board members are highly qualified and competent, ensuring effective leadership and governance. The Board currently comprises eight members, including the Chief Executive Officer, with three members serving as Independent Directors to provide independent oversight within the governance framework.

The Board members meet on a quarterly basis or conduct regular discussions on a need basis. The Chairman of the Board exercises close oversight over the Company's affairs, ensuring effective governance. Additionally, a Board Audit Committee is in place to oversee financial reporting and internal controls. The Board remains actively engaged in providing strategic direction and guidance to the Company's management.

A.F. Ferguson & CO., Chartered Accountants, is the external auditor of the Company. They have expressed an unqualified opinion on the Company’s financial statements at end-Jun-25

Lucky Electric's management team comprises qualified professionals in areas such as technical, commercial, and legal specialists, with the capability to construct, develop, operate, finance, and maintain the project. The Company has a well-defined organizational structure, with the CEO reporting directly to the Board.

Mr. Ruhail Muhammad, the Chief Executive Officer, holds an MBA and is a CFA charterholder. Mr. Ruhail carries vast experience in leading various corporate organizations and also serves on the boards of several renowned corporate entities. An experienced team of professionals supports him, including Mr. Naeem Kasbati, FCA, FCMA, CPA, as Executive Director & CFO, and Engineer Intisar ul Haq Haqqi as Executive Director – Technical.

Over the years since its incorporation, Lucky Electric Power Company's management has played a pivotal role in driving the organization's growth through strategic decision-making and operational excellence. By achieving key project milestones in a timely and efficient manner, the management has demonstrated strong leadership, effective resource utilization, and a commitment to continuous improvement, ensuring the Company's long-term success and sustainability.

Lucky Electric Power Company upholds a strong control environment by integrating advanced IT solutions, well-structured governance practices, and robust risk management frameworks. With a well-integrated and reliable IT infrastructure, the Company enhances operational efficiency, ensures regulatory compliance, and maintains transparency across its business functions, contributing to long-term sustainability and excellence.

The electricity generated is sold to the Central Power Purchasing Agency (CPPA-G) under a 30-year Power Purchase Agreement (PPA). The Revised Commercial Operation Date (RCOD) as per the PPA was March 1, 2021. However, the Company achieved Commercial Operation Date (COD) on March 21, 2022, owing to the global pandemic of Novel Coronavirus.

The Company has entered into a 7-year Operation & Maintenance (O&M) contract with M/s Harbin Electric International Co., Ltd. - P.R. China (HEI), effective from March 2023. The project's revenues and cash flows are primarily dependent on maintaining the plant's operational availability and capacity factors at adequate levels.

Lucky Electric's Coal Supply Agreement (CSA) is with SECMC, which is expanding its coal mine in Thar Block-II to 13.1 million tons per annum in three phases. The plant is currently running on imported coal from Indonesia due to the unavailability of Thar coal.

Lucky Electric has obtained four types of insurance to cover its various types of risks.

Total electricity generated in the country during FY25 amounted to 127,160 GWh. This is a decline from FY24's 138,029 GWh (and FY23's 154,056 GWh). The decline in generation/consumption is attributed to reduced economic activity, a slowdown in industrial and commercial operations, high electricity tariffs impacting household and overall patterns, increased reliance on off-grid solar solutions (especially rooftop/net metering), energy conservation measures, and weak industrial demand. As of December 31, 2025 (end of 1HFY26), Pakistan's total installed power generation capacity in the national grid stood at approximately 46,605 MW.  This marks an increase from the June 30, 2024, figure of 42,362 MW, primarily driven by additions in renewables and minor contributions from other sources.

Lucky Electric Power Company Limited (LEPCL) generated a net electrical output of 1,018.68 GWh during FY25, down from 1,688.45 GWh in FY24.

The contractually agreed availability for the plant over the 30-year term is set at 85%, with non-compliance resulting in Liquidated Damages (LDs) imposed by the Power Purchaser. During the half-year ended December 31, 2025, the plant achieved the required availability, demonstrating strong operational efficiency and reliability. However, in January 2026, the plant did not achieve the required availability.

Lucky Electric's capital structure comprises 25% equity and 75% debt financing of the initial estimated project cost of approximately USD 895 million, financed through local and foreign financial institutions. Local facilities obtained from a consortium of banks aggregate to PKR 65.9 billion, with a tenure of 10 years commencing from June 2022, repayable in 40 quarterly installments. As of March 1, 2026, the Company has repaid PKR 10.1 billion (approximately 15%) of the local loan principal. The foreign facility amounts to USD 210 million, comprising USD 20 million repayable quarterly and USD 190 million repayable semi-annually. To date, the Company has repaid USD 5.8 million out of the USD 20 million facility and USD 48.2 million out of the USD 190 million facility, representing an overall repayment of approximately 26% of the foreign debt.

Independent Power Producers (IPPs) continue to face payment delays from the power purchaser due to ongoing circular debt challenges in the country. As a result, Lucky Electric Power Company relies on short-term borrowings to meet its liquidity needs, with cash and bank balances standing at PKR 1,779 million as of December 31, 2025. However, the Company benefits from the explicit financial support of the Yunus Brothers Group (YBG), ensuring stability and the ability to navigate liquidity challenges effectively.

The Company manages its working capital needs through internal cash flows and short-term borrowings due to delayed payments from the power purchaser. Receivables of the Company stood at PKR 19,386 million as of June 30, 2025, compared to PKR 33,604 million as of June 30, 2024. As of December 31, 2025, receivables further declined to PKR 16,371 million. Short-term borrowings stood at PKR 17,790 million as of June 30, 2025, down from PKR 40,450 million as of June 30, 2024. As of December 31, 2025, short-term borrowings were recorded at PKR 20,592 million.

The stability and sustainability of Lucky Electric's future cash flows depend entirely on the continuous operation of its power plant. During the year ended June 30, 2025, the Company generated FCFO of PKR 47,247 million, compared to PKR 55,812 million during the year ended June 30, 2024. For the half-year ended December 31, 2025, FCFO stood at PKR 20,931 million. The interest coverage ratio improved to 2.7x as of December 31, 2025, compared to 2.3x as of June 30, 2025, and 1.8x as of June 30, 2024.

The project has incurred a project cost of USD 895 million with a 75:25 debt-to-equity ratio. As of June 30, 2025, the ratio stood at 65.1%, with total debt of the Company at PKR 124,005 million and equity at PKR 66,552 million.