PACRA Maintain Entity Rating of Halmore Power Generation Company Limited

The ratings reflect Halmore Power Generation Company Limited's established position as an Independent Power Producer, supported by long-term contractual arrangements under the 2002 Power Policy. The Company operates a 225 MW dual-fuel combined cycle plant under a 30-year Power Purchase Agreement with CPPA-G, backed by a sovereign guarantee. Revenue stability is underpinned by capacity payments, contingent on meeting availability benchmarks (88% required), while energy payments are linked to actual generation. During FY 25, the plant demonstrated sound performance, achieving 95% availability well above the required threshold, and generation stood at 364 GWh. Operational risks are mitigated through a long-term O&M agreement with General Electric, guaranteeing output and heat rate, and fuel supply is secured via agreements with SNGPL (gas) and PSO (HSD). Insurance coverage for property damage and business interruption is adequate. In the context of sector-wide power sector reforms, negotiations were undertaken with IPPs to transition existing tariffs to a hybrid model; however, IPPs with foreign shareholding, including the Company, retained their original contractual terms, and accordingly, Halmore’s tariff structure remains unchanged with no modification to the PPA framework. Notwithstanding these strengths, liquidity management continues to be influenced by persistent circular debt in the power sector, reflected in elevated trade receivables of PKR 8,946 million. Although the release of certain outstanding payments following tariff-related discussions provided liquidity comfort, the Company continues to carry significant receivable balances and relies on short-term borrowings amounting to PKR 6,545mln to bridge working capital gaps, indicating that utilization of borrowings remains material.
Sustained operational performance, continued adherence to availability benchmarks, and disciplined financial management remain critical to maintaining the Company's credit profile. The sovereign guarantee on receivables and the stable capacity-based payment structure provide comfort. Additionally, any adverse changes in the regulatory framework or contractual environment may impact the ratings.

About the Entity
Halmore Power Generation Company Limited, incorporated in 2005 under Pakistan's Power Policy 2002, operates a 225 MW dual-fuel combined cycle gas turbine plant in Bhikhi, Sheikhupura, on a Build-Own-Operate basis. The plant achieved commercial operations in June 2011 and sells electricity to CPPA-G under a 30-year Power Purchase Agreement expiring in 2041. The Company is 99.99% owned by UK-based Mian Karim Ud Din. The Board, chaired by Mr. Karim Ud Din, includes the CEO, Mr. Mahmood Akbar, and two family representatives.