Intermarket Pulse: Pakistan IPPs - Power generation on the rise in 4MFY17
​According to Nepra, generation from Jul-Oct’16 increased 4%YoY to 14,126MW on account of uptick in generation of (i) RFO based plants, and (ii) Nuclear plants. Gas based generation declined moderately, where seemingly LNG provision to IPPs have not increased substantially from previous year, in our view.
Increase in RFO prices (in and of itself) will not significantly contribute to circular debt buildup as cost of RFO based generation is still 50% lower than peak levels seen in 2013. But, given elections in 2018, there is the risk that GoP may revert to power subsidies if fuel prices rise significantly in 2017.
As per PPIB, about 6,273MW could potentially be added to national grid by end CY17 that will minimize load shedding in country, but this new RLNG/coal based generation will not immediately result in lower cost of generation, in our view.
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.
Intermarket Securities Limited (IMS) is a full service corporate brokerage firm based in Karachi, Pakistan. We service both domestic and international clients. IMS was ranked #2 Best Local Brokerage and #3 Best for Overall Country Research for 2016 by AsiaMoney.
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