PACRA Maintains the rating of WAPDA - Dasu Consolidated Sukuk - PKR 52.8bln

The Water and Power Development Authority ("WAPDA") issued five sukuks in series A–E, cumulatively amounting to PKR 52.8bln. These sukuks were floated at different intervals, beginning in May 2017 and ending in May 2024. Each of these instruments had been accorded the highest credit rating of “AAA” by PACRA. The sukuk issuances were primarily undertaken to partially finance stage-1 of the Dasu Hydropower Project ("Project"). To streamline its debt profile and reduce administrative complexities, WAPDA consolidated all five outstanding sukuks into a single, unified instrument. This new instrument was titled the “WAPDA - Dasu Consolidated Sukuk - PKR 52.8bln,” effective from May 06, 2025. Following the consolidation, all stipulations and obligations of the sukuks remained wholly preserved, retaining their validity and enforceability in accordance with prior terms. Furthermore, the rights and obligations of all contractual parties were preserved in their entirety, with no alteration arising as a result of the consolidation. The rating of the consolidated Sukuk shall remain aligned with the ratings previously assigned to the five individual sukuks. The assigned rating of the consolidated Sukuk reflects the unconditional and irrevocable GoP guarantee, covering both principal and profit, with payments made immediately upon demand. To support timely servicing, WAPDA maintains a DPA under lien with the Investment 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. The cost of this Project stood at PKR 1.74trln in May’25, a 258% increase from the original PKR 486bln approved in 2014. Key factors for this significant cost escalation include difficulties in land acquisition, inflationary price escalations, and security-related costs. The development portfolio is largely financed through GoP grants, re-lending, and loans, highlighting strong sovereign support. Moreover, WAPDA benefits from a favorable tariff framework that ensures cost recovery and reasonable returns, strengthening its financial profile and capacity to deliver major infrastructure projects. The Project is financed through a mix of WAPDA internally generated cash and borrowings i) Long-term (local & foreign) ii) Bonds Issuance (Islamic & Conventional). As of FY25, the Project has achieved ~26.8% physical progress and 23.7% financial progress. During 6MFY25, WAPDA reported PKR 57bln in revenue and PKR 23bln in profit. (SPLY: PKR 38bln in revenue and PKR 17bln in profit).
Given its crucial role and the Govt.’s strong support and direct oversight, full ownership and control are expected to remain with the Govt. in the coming years.

About the Entity
WAPDA, an autonomous body, was established by the WAPDA Act of 1958 to develop and maintain Pakistan's water and power resources. The total generation capacity of WAPDA is 9,459MW.

About the Instrument
WAPDA has consolidated five sukuks to single, unified instrument under the title "WAPDA - Dasu Consolidated Sukuk" ("Sukuk") of PKR 52.8bln in May'25 to finance the Dasu project. The Project, launched in 2017 on the Indus River in Kohistan, KP, is set to be Pakistan’s second-largest with a total capacity of 4,320 MW (2,160 MW in Stage-I). Expected to complete by May'27, it will generate about 21,485 GWh annually, with Stage-I involving a hydraulic structure and underground power facilities. The outstanding principal amount of PKR 42.4bln of Consolidated Sukuk will be paid in fifteen equal semi annual installments of PKR 2.8bln each commencing from May'25. As of May'25, a total rental/profit amounting of PKR 27.7bln and total principal amounting PKR 13bln has been paid by WAPDA.