Pakistan IPPs and OMCs : A sigh of relief…!
- In a recent development Economic Coordination Committee (ECC) has approved partial repayment of PKR80bn (15% of total energy debt) which should partially reduce the cash crunch and likley allow resumption of cash dividend by small listed IPPs.
- Out of the total amount ~PKR35-40bn would flow to IPPs while ~PKR15-20bn will be paid to Pakistan State Oil (PSO) and gas companies. We project 5-11% reduction in overdue payments for NPL, NCPL, HUBC.
- Downstream sector would also be modestly impacted where the largest payment backlog, within the entire energy chain, rests on PSO’s books (PKR313bn out of PKR520bn).
- More importantly, the government’s plan to make a big one-off payment, ahead of peak demand season and general elections will be a key positive for the entire energy chain. However, details on the government’s plans are scarce.
- Based on recent developments we maintain our BUY call on NPL/NCPL with TP of PKR41/36 respectively. Additionally, we have a strong liking for HUBC with SOTP based TP of PKR135 given upcoming triggers, though it is not being a major beneficiary of partial repayment.
Hub Power Company is a holding company. Through its subsidiaries, Co. is engaged as a power producer in Pakistan that focuses on developing, owning, operating and maintaining power stations. Co. supplies electricity to Water and Power Development Authority and National Transmission and Despatch Company under long term Power Purchase Agreements for its Hub and Narowal plants respectively.
Nishat Chunian Power Ltd. Nishat Chunian Power Limited is a Pakistan-based power generation company. The principal activity of the Company includes building, owning, operating and maintaining a fuel fired power station having gross capacity of 200 megawatts and net capacity of 195.722 megawatts at Jamber Kalan, Tehsil Pattoki, District Kasur, Punjab, Pakistan. The Company's project is a 200 megawatts residual furnace oil (RFO) fired reciprocating engine technology combined cycle power plant. The primary components of the plant has approximately 11 engine sets of type 18V46 manufactured by WARTSILA Finland, and one heat recovery steam turbine and alternator sets manufactured by Converteam and ABB. The primary fuel of the plant is RFO. The Company is a subsidiary of Nishat (Chunian) Limited.
Nishat Power Limited is a Pakistan-based company, which as an independent power producer (IPP). The principal activity of the Company includes building, owning, operating and maintaining a fuel fired power plant based on Reciprocating Engine Technology having gross capacity of 200 megawatts in Jamber Kalan, Tehsil Pattoki, District Kasur, Punjab, Pakistan. The Company is a subsidiary of Nishat Mills Limited. The Company, through its subsidiary, Lalpir Solar Power (Private) Limited, is engaged in building, owning, operating, and maintaining or investing in a solar power project having gross capacity up to 20 megawatt peak (MWp) with net estimated generation capacity of approximately 19 MWp. Its project site is located at Mehmood Kot, Muzaffar Garh district.
Pakistan State Oil is a petroleum group based in Pakistan. Co.'s principal activities are the procurement, storage and marketing of petroleum and related products. Co. also blends and markets various kinds of lubricating oils.
BMA is amongst the leading financial groups in Pakistan. BMA Capital’s core areas of business include Capital Markets, Corporate Finance & Advisory, Asset Management, and Financial Products Distribution. BMA Capital is the leader in privatisation advisory in Pakistan, having successfully advised on over 50% of all privatisations in Pakistan, by value, in transactions valued in excess of US$4 billion. Recent transactions include joint lead managing the $813 million GDR Offering of 10% of OGDCL on the London Stock Exchange in 2006-07, and advising Etisalat on their successful acquisition of a 26% strategic stake in Pakistan Telecommunications Company Limited (PTCL) for US$2.6 billion, the largest M&A transaction and foreign direct investment in Pakistan’s history. The firm is among the top brokers in the Pakistan equity and treasury markets, and is among a handful of firms that comprehensively cover all segments of the capital markets. This is supported by a very strong and independent research capability, which is quoted regularly in both local and international media. BMA Capital’s retail brokerage brand, BMA Trade, has launched a nationwide network of branches as well as a comprehensive online trading platform, enabling investors across Pakistan to take part in the capital markets.
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