Analyst
Iram Shahzadi
iram.shahzadi@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA maintains the rating of WAPDA Dasu Sukuk-C
Rating Type | Debt Instrument | |
Current (17-May-24 ) |
Previous (17-Nov-23 ) |
|
Action | Maintain | Maintain |
Long Term | AAA | AAA |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The Pakistan Water and Power Development Authority ("WAPDA") has issued the 3rd tranche of Sukuk worth PKR 6,352.94mln on 29-Mar-23. WAPDA will utilize this amount to partially finance the construction of the Dasu hydropower project Stage-I ("Dasu"). Dasu, once completed would become the second-largest hydel project in Pakistan. Dasu is a run-river project on the Indus River located in Dasu Kohistan, Khyber Pakhtunkhwa about 350 KM from Islamabad. The project started in 2017 and is expected to be completed in May'27. The project will be completed in two stages, the installed capacity would be 4,320MW (stage-I 2,160MW) and the total annual energy of 21,485 GWh will be produced (Stage-I 12,220 GWh). Stage -I project includes constructing a hydraulic structure on the Indus River and underground power generation facilities. The total land required for the project has been acquired. The Project would be financed through a mix of WAPDA internally generated cash (15%) and borrowing (85%) i) Long-term (local & foreign) and ii) bond issuance (Islamic & Conventional). Currently, the physical progress of the Project stands at ~21.14%, while financial progress stands at ~57.86%. The Series C Sukuk is part of the local financing facility package of PKR 144bln availed from the local syndicate bank for a period of 15 years, whereby PKR 52.8bln is to be raised in the form of GOP guarantee-backed Sukuk in five no. tranches. WAPDA has currently issued 4 Series (A, B, C, and D) of Sukuk by the aggregate amount of PKR 42.706bln, and the remaining available limit of PKR 10.094bln will be issued in the form of Sukuk -Series E. The assigned rating of Sukuk āCā incorporates an unconditional and irrevocable guarantee by the Government of Pakistan (GoP). The guarantee covers the payment of the total outstanding amount of the Sukuk and the related profit component. GOP would pay the entire call 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 is 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. WAPDA has generated a topline of ~PKR 75bln (FY22: ~PKR 99bln) and a bottom line of ~PKR 8bln during FY23 (FY22: ~PKR 19bln).
WAPDA generated 31,286 GWh of electricity in FY23. WAPDA expects to generate an additional ~8,990MW by the completion of new hydel projects in the next six years.
About
the Entity
The Pakistan Water and Power Development Authority (WAPDA), was established through an act of parliament in February 1958 (WAPDA Act 1958) for the development and maintenance of water and power resources. WAPDA has 22 projects with a total hydel generation capacity of 9,389MW.
About
the Instrument
WAPDA has issued a rated, secured, privately placed, Islamic certificate WAPDA Dasu Sukuk-C of PKR 6,352.94mln on 29-Mar-23 to partially finance stage-1 of Dasu Hydropower Project. Sukuk has a tenor of 9 years and carries a profit rate of 6MK + 1.45% p.a paid semi-annually in arrears, calculated on a 365-day basis on the outstanding principal amount. Sukuk will redeem after nineteen equal semi-annual installments amounting to PKR 334mln which commenced from May 23.