KESC assigned A+/A2 ratings by JCR-VIS Asia; proposed finance certificates obtain A+

KESC assigned A+/A2 ratings by JCR-VIS Asia; proposed finance certificates obtain A+

KARACHI, Nov 25: The Karachi Electric Supply Company is proud to announce that it has been assigned entity ratings of “A+/A2,” whereas its proposed finance certificates obtained preliminary ratings of “A+” by JCR-VIS Credit Rating Company Asia, in recognition of the power utility’s high performance within a short span of time. Outlook on the assigned ratings is ‘Positive.’

These ratings appreciate the strategic importance and the strong business profile of KESC. This was supported by the enhancement of KESC’s power generation capacity, reduction in transmission and distribution losses, a stable and professional management team, and, improvement of its financial risk profile over the past 5 years. The rating company acknowledged KESC’s demonstrated financial support from its sponsors, Abraaj Capital, which provide strength to the assessment of an overall risk profile of the institution. Conversion of a portion of the total debt extended by the International Finance Corporation (IFC) and Asian Development Bank (ADB) into equity also reflected confidence of stakeholders in KESC, the rating company pronounced.

The JCR-VIS Asia is a founder shareholder of the Islamic International Rating Agency Bahrain, a Joint Venture Partner of Credit Rating and Information Services Bangladesh, Member of the Association of Credit Rating Agencies in Asia, and one of the three founding partners of International Ratings Group.

The pronouncement further said that over three fourths of over 1,000 MWs enhanced power has been added through the more efficient combined cycle power plants (CCPP). Three existing open cycle plants are also being converted into combined cycle which would further enhance efficiency and capacity. Given the current shortage of gas supply all over the country, KESC is also actively pursuing diversification of its fuel mix, and in the first phase, conversion of two units of Bin Qasim Power Station-I to coal is currently underway and will be completed in 2.5 years after the notification of coal tariff. The notification of the coal tariff is expected by the year end, it said.

The JCR-VIS pronouncement also appreciated KESC’s efficiency based tariff structure, and said, that proficiency has depicted marked improvement since the commissioning of the 560-MWs prime project at BQPS-II. It also mentioned that a number of KESC initiatives are on the anvil to curtail transmission and distribution losses in the high loss areas of the city, which will in turn improve recoveries.