Pakistan Power: Periodic power hikes are the new norm
- NEPRA in its decision dated 14th June, promulgated domestic consumer tariff hike across 10 DISCOs by a uniform rate of PkR1.494/KwH till Dec'19 with the aim of recovering an additional PkR189.64bn over an extended period of fifteen months
- From the DISCO-wide consultative process, a demarcation of costs to be recovered pinpoints ~82% of arrears arising from Capacity Purchase Price, i.e. variations in core operating expenses, disbursed to IPPs for interest payments, ROE and indexed to US$, KIBOR and CPI variation on quarterly basis
- In addition to the costs to be recovered, the removal of Net Hydel Profits from recovery calculations and delay in collection of previous arrears (before FY18 in most cases) are expected to push tariffs hikes in a similar band (PkR1.5/2.0 KwH), while the extended time period for collections (15 months in this case) presents upside risks to these hikes (current indexation movements are in addition to previous amounts)
- Consistency of power tariff hikes show that the GoP is willing to continue making unpopular decisions, while implementing whole-sale reforms, where we flag the risk of worsening recoveries, higher T&D losses as the incentives to steal rise.
- With its diversified exposure to various projects and backed by on-boarding of CPHGC, we find HUBC is the best bet amongst IPPs to play on improved liquidity in the power chain going forward.
Kot Addu Power Co Ltd. Kot Addu Power Company Limited is a Pakistan-based power generation company. The Company's principal activities are to own, operate and maintain a multi-fuel fired power station with approximately 15 generating units with a nameplate capacity of 1,600 megawatts (MW) in Kot Addu, District Muzaffargarh, Punjab, Pakistan. The Company also sells the electricity produced therefrom to a single customer, the Pakistan water and power development authority. The power plant is a multi-fuel gas-turbine power plant using three fuels to generate electricity: gas, light sulfur furnace oil and high speed diesel. The plant's combined cycle technology enables it to use the waste heat from the gas turbine exhaust to produce steam in the heat recovery steam generator, which in turn is used to run the steam turbines.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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