PACRA Maintains the Entity Ratings of National Grid Company of Pakistan Limited

The assigned ratings reflect the strategic importance of National Grid Company of Pakistan Limited (NGC or "the Company") to Pakistan's power infrastructure, underpinned by sovereign ownership, its entrenched market position, and established technical expertise. NGC plays a pivotal role in transmitting electricity from generation sources to distribution companies nationwide, ensuring grid stability and reliability. Its regulated cost-plus business model, with earnings linked to NEPRA-approved investment plans and allowed returns, provides stable and predictable cash flows. Operational performance remained strong during FY25, with 133,621 GWh of electricity received and 130,189 GWh delivered, while transmission and transformation (T&T) losses of 2.569% remained within NEPRA's allowed threshold of 2.639%. Revenue stood at PKR 73,549mln. Borrowings are predominantly capex-driven and largely comprise Government of Pakistan (GoP) relent loans for donor-funded transmission projects, with debt servicing supported through the regulated tariff mechanism. As of March 2026, total borrowings amounted to PKR 489mln, translating into a leverage ratio of 72.3%. NGC continues to advance its nationwide transmission expansion program through grid station augmentations, new transmission infrastructure, and the phased energization of strategic projects, including the 500kV Lahore North Grid Station. These investments are expected to strengthen grid reliability, enhance transmission capacity, and support Pakistan's growing electricity demand over the medium term.
Going forward, the ratings remain dependent on the timely execution of the approved investment program, maintenance of a stable financial profile, and effective management of operational and sector-specific challenges. The Rating Watch remains contingent upon the timely resolution of the qualified audit opinion, execution of the Business Transfer Agreement (BTA), resolution of the outstanding inter-government entity (IGE) balances, and greater clarity on the restructuring framework for EIDMC, including its business model, revenue mechanism, and asset allocation. Progress on these matters remains critical for the removal of the Rating Watch.

About the Entity
National Grid Company of Pakistan Limited (NGC) was incorporated in 1998 and commenced commercial operations in 1999. It holds a 30-year transmission license granted by NEPRA and is 88% owned by the Government of Pakistan, with the remaining stake held by employees under the Benazir Employee Stock Option Scheme (BESOS). NGC owns and operates Pakistan's 220kV and 500kV Extra High Voltage (EHV) transmission network, comprising approximately 23,117 kilometers of transmission lines and 68 grid stations with an installed capacity of 64,250 MVA, serving the country except K-Electric's licensed territory. Following the unbundling of NTDC, the transmission business continues under NGC, while system and market operations have been transferred to ISMO, and the execution of future transmission infrastructure projects is planned to be undertaken by EIDMC.