
Neelum Jhelum rehab crucial: WAPDA chief
He made these remarks while presiding over a meeting at Wapda House.
The chairman was briefed on Wapda's mandate, its completed mega projects in the water and power sectors, its role in the country's socio-economic development, and the progress of ongoing construction projects.

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Business Recorder
18 hours ago
- Business Recorder
Moody's upgrades Wapda's CFR, BCA ratings
ISLAMABAD: Moody's Ratings (Moody's) has upgraded Pakistan Water and Power Development Authority's corporate family rating (CFR) to Caa1 from Caa2 and Baseline Credit Assessment (BCA) to caa1 from caa2. Concurrently, it changed the outlook to stable from positive. But at the same time expressed concern over its weak financial position and persistent operational challenges in Neelam-Jhelum power project. 'The upgrade of Wapda's CFR and the revision of outlook reflect the recent rating action taken on the government of Pakistan. This alignment underscores the strong credit linkage between Wapda and the sovereign, driven by the government's full ownership and direct oversight of the company, as well as Wapda's exclusive focus on domestic operations,' said Erman Zhang, a Moody's Ratings analyst. BCA also pushed up: Moody's upgrades Wapda's CFR to Caa2 This rating action follows the rating action on the government of Pakistan (Caa1 stable) on 13 August 2025. Wapda'sCaa1 CFR incorporates its caa1 BCA and Moody's assessment of a high likelihood of extraordinary support from, and the company's very high dependence on, the government of Pakistan when needed, under its Joint Default Analysis (JDA) for government-related issuers. Wapda'scaa1 BCA reflects its exposure to persistent operating challenges at its 969 megawatt (MW) Neelum-Jhelum power station (NJHP) and its weak financial profile due to its sizeable hydropower capacity expansion plan, its long receivables cycle and delayed tariff decisions. The BCA also considers Wapda's position in Pakistan's power sector as a dominant hydropower supplier, as well as the recurring financial support it receives from the government. The rating agency noted that the company's weak financial profile is the result of an unpredictable regulatory framework and its inability to sufficiently recover costs in a timely manner, leading to delayed tariff decisions and a long receivables cycle. Moody's projected that the Wapda's funds from operations (FFO) will remain very weak over the next 12-18 months, and a sustained recovery will depend on the regulator approving an increase in its tariffs as well as the operational resumption of NJHP. Moody's said that its assessment of Wapda's financial metrics is based on the combined financials of Wapda's power segment and Neelum Jhelum. The report said for the same reasons, WAPDA's liquidity will remain strained because of its substantial current borrowings and large capital spending. The company did not repay certain government loans as per the agreed repayment schedule, in part due to the delays in its recovery of outstanding receivables from its government-owned off-taker. Moody's expect this situation will continue. Operations at NJHP have been suspended since May 2024 because of weak pressure in the hydro project's tailrace tunnel. It is unclear when the project could resume operations or the repair cost required at present. During this period, NJHP will likely rely on recovery of outstanding receivables to meet its operating cash requirement, fund the repair cost and service its external debt. NJHP had previously shut down for 13 months after major cracks were discovered in its tunnel and had just resumed operations in September 2023. Moody's said expectation of a high likelihood of government support for Wapda considers the Pakistani government's full ownership and direct supervision of the company. It also reflects the company's strategic importance to the government as it is an important platform that (1) constructs and operates hydropower assets to supply affordable electricity in Pakistan, and (2) builds water storage facilities to help address the country's acute water challenges. However, such considerations are offset by the risks stemming from the government's low policy predictability and transparency. In addition, the financial challenges faced by the government, reflected in its Caa1 ratings, indicate its limited capacity to provide support to Wapda. The stable outlook on the rating mirrors the stable outlook on Pakistan's sovereign ratings, based on Moody's expectation that the relationship between Wapda and the government will remain intact at least over the next 12-18 months. Copyright Business Recorder, 2025


Business Recorder
a day ago
- Business Recorder
KAPCO appoints Lt-Gen Muhammad Saeed (retd) as chairman
Kot Addu Power Company Limited (KAPCO) has appointed Lt. General Muhammad Saeed (retd) as the company's new chairman and director. The listed IPP disclosed the development in its notice to the Pakistan Stock Exchange (PSX) on Friday. 'We have to inform you that Lt. General Muhammad Saeed (retd) has/been appointed as chairman/director with effect from 2025-08-15 in place of Lt. General Sajjad Ghani (retd),' read the notice. Last month, KAPCO received shareholder approval to sell its Gas Turbines GT-3 and GT-4, along with associated components, to Rizwan Steel (Private) Limited for Rs800 million. It shared that Shahab Qader Khan, Chief Executive and/or Adolf Anthony Rath, company secretary, are authorised to dispose of the plant and machinery and to act on behalf of the company. Incorporated in Pakistan on April 25, 1996, as a public limited company, KAPCO's principal activities are to own, operate and maintain a multi-fuel-fired power station with fifteen generating units with a nameplate capacity of 1,600 MW in Kot Addu, Punjab. On June 27, 1996, following international competitive bidding by the Privatisation Commission Government of Pakistan, the company was privatised. In February 2005, the Privatisation Commission (on behalf of WAPDA) sold another 18% of WAPDA shareholding in the Company to the General Public and the Company became listed. The Company is currently listed on the Pakistan Stock Exchange.


Business Recorder
5 days ago
- Business Recorder
Failure to achieve financial close: Two key CPEC hydropower projects excluded from IGCEP
ISLAMABAD: The government has excluded two major China-Pakistan Economic Corridor (CPEC) hydropower projects — totalling 1,824 MW and valuing $4 billion — from the Indicative Generation Capacity Expansion Plan (IGCEP) 2025–35, citing failure to achieve financial closure. 'We have excluded the 1,124 MW Kohala Hydropower Project and the 700.7 MW Azad Pattan Hydropower Project from the IGCEP till 2034, along with other private sector projects,' revealed Federal Minister for Power, Sardar Awais Khan Leghari, while briefing the Senate Standing Committee on Power, chaired by Senator Mohsin Aziz. The committee witnessed heated debate on non-inclusion of the 207 MW Madyan and 88 MW GabralKalam hydropower projects. Brig Tariq Saddozai (Retd), Special Assistant to the Chief Minister of Khyber Pakhtunkhwa (KPK) on Energy and Power, argued that both projects were included in the previous IGCEP as committed projects. He stated that despite meeting the criteria set by the Council of Common Interests (CCI) in 2021—and being protected under the National Electricity Plan 2023–27—the projects were removed from the latest IGCEP. He added that the provincial government had already invested Rs 14 billion in land and infrastructure for the projects. Saddozai claimed the federal government had 'moved the goalposts,' resulting in the exclusion of KPK's projects from the IGCEP 2025– and the Power Secretary maintained that both World Bank-funded projects had not signed binding contracts and did not qualify under the least-cost project criteria. They clarified that the IGCEP must be approved by the National Electric Power Regulatory Authority (NEPRA) following a public hearing, during which all affected projects can present their cases. CPEC hydropower project achieves hoisting of last rotor in Mansehra While the Power Division rejected KPK's arguments, it agreed to hold further discussions with the provincial government. During the discussion on the interim Net Hydel Profit (NHP) arrangement, Rehmat Akhtar, CEO of the Central Power Purchasing Agency–Guaranteed (CPPA-G), confirmed a payment of Rs 1.10/kWh to KPK, with a 5% annual indexation. He said CPPA-G is currently making payments to WAPDA for onward distribution to both KPK and Punjab. He also noted that the Rs 1.10/kWh rate, including 5% annual indexation from 2016, is being recovered from consumers. Outstanding payments of Rs 40 billion under NHP have already been accepted. Once the determinations for FY2023–24 and FY2024–25 are finalized, the NHP rate will increase to Rs 1.70/kWh. The KPK government claimed its outstanding dues total Rs 76 billion, while WAPDA maintained the amount is Rs 63 billion. The Committee Chairman recommended increasing NHP monthly payments to Rs 5 billion, up from the current Rs 3–4 billion, and proposed that payments be routed through CPPA-G instead of WAPDA. It was decided that an internal meeting at the Ministry level would be convened to finalize the proposed NHP payment mechanism. On the issue of wheeling charges (Use of System Charges – UoSC), the Power Minister informed the committee that the Cabinet Committee on Energy (CCoE) has approved wheeling charges at Rs 12.55/kWh, excluding stranded costs—one of the major factors behind previous higher rates. The Cabinet ratified the decision. Initially, an allocated capacity of 800 MW will be made available for competitive bidding. The highest bidder will be granted access to wheel electricity. The committee lauded the Power Minister and his team for addressing the wheeling charges issue and for achieving a Rs 190 billion reduction in losses incurred by the power distribution companies (Discos). Meanwhile, according to a press release issued by the Senate Secretariat, Federal Minister for Power Awais Ahmad Leghari clarified that KP authorities did not fully present the CCI-approved power policy, and citing a single clause without context was misleading. He added that if these projects were included, electricity prices could rise by Rs6 per unit by 2034. The Power Division, he said, had removed 8,000 to 10,000 MW worth of projects from the plan — including several CPEC power projects — to protect the public from expensive electricity. The minister further informed the committee that the government had terminated agreements with five IPPs and renegotiated others, resulting in an estimated saving of Rs3.4 trillion over the next four to five years. This year alone, distribution company (DISCO) losses were reduced by Rs191 billion. He acknowledged the persistent problem of electricity theft but noted that the target for establishing a competitive market had been achieved, freeing the government from mandatory power purchases. The committee also deliberated on captive power plants, costly imported coal and LNG projects, and the tariff structure for the protected category. The chairman committee called for a review of the protected category policy. Secretary Power Division confirmed that a reassessment is underway and that consumers using up to 200 units are receiving subsidies. The chairman urged the federal minister to introduce multiple slab rates to protect the consumers from a sudden high jump in tariff. Senator Mohsin Aziz urged both the federal and provincial governments to revisit the matter so that these KP projects could be completed, benefiting both the province and the country. Copyright Business Recorder, 2025