PACRA maintains Entity Rating of China Power Hub Generation Company (PVT.) Limited

China Power Hub Generation Company (Pvt.) Limited (“CPHGC” or “the Company”) maintains a strong business risk profile supported by the stability of its regulated framework and the sovereign-backed payment structure embedded in the PPA. Under NEPRA’s tariff mechanism, capacity payments, O&M charges, debt servicing, equity returns, and fuel cost components are indexed to multiple macroeconomic factors including US CPI, N-CPI, KIBOR, SOFR, exchange rate movements, international coal prices, and calorific values providing insulation against cost volatility. Recent NEPRA notifications for the October–December 2025 quarter reaffirm the Company’s entitlement to full indexation while the provisional tariff adjustments pending final adjudication. Operationally, the plant continues to demonstrate dependable performance, consistently meeting availability obligations despite subdued national dispatch levels. The transition of Operations & Maintenance (O&M) from related-party contractors (CPHO and CPIME) to an in-house model in February 2025 improves control and cost visibility, with Company-hired staff ensuring continuity in performance standards. Fuel supply remains reliant on imported coal received through the integrated jetty. Following the expiry of the CSA, the Company now procures coal on a spot basis as per operational requirements, ensuring continuity of supply. Consistent availability performance maintains full capacity payment entitlement under the PPA, while the shift to self-managed O&M enhances operational control. Financially, liquidity pressures stem from the persistent accumulation of receivables from power purchasers, a sector-wide challenge. Receivables reached PKR 95.4bn by September 2025, with overdue amounts covered by the sovereign guarantee under the Implementation Agreement. Despite delays, the Company has maintained timely service for its long-term project debt, which continues to amortize as scheduled. Capital structure remains balanced, while profitability is protected through regulated returns. The Company declared an interim dividend in October 2025; however, its impact on liquidity is expected to be manageable given the protected cash flow mechanisms and ongoing payments under the GoP guarantee framework.
The ratings remain supported by the ring-fenced project structure, predictable cash flows, and a strong sponsor profile. Key sensitivities include the pace of receivable recoveries, sector-wide liquidity, timely fuel procurement, the final decision on the pending tariff, and any regulatory changes arising from power sector reforms or the implementation of a competitive energy market, which could impact operational and financial dynamics once enforced. Nevertheless, the Company’s contractual protections, tariff indexation, and consistent debt repayment discipline continue to underpin a healthy financial position.

About the Entity
China Power Hub Generation Company (Pvt.) Limited (CPHGC) is a 1,320MW coal-fired Independent Power Producer established under the China–Pakistan Economic Corridor (CPEC). The Company operates under a long-term Power Purchase Agreement (PPA) with Central Power Purchasing Agency–Guarantee (CPPA-G), ensuring regulated returns determined by NEPRA. CPHGC benefits from an integrated supply chain including a captive jetty for imported coal, purpose-built ash disposal systems, and a fully compliant environmental management setup. The shareholding is split between China Power International Holding (CPIC) and The Hub Power Company, both established sponsors with long operational track records. The Company achieved Commercial Operations Date (COD) in August 2019 and has consistently met performance and availability benchmarks since commissioning.