Independent Power Producer Rating

Independent Power Producer(IPP) is an entity that owns facilities to generate electricity. IPPs are special purpose companies and in Pakistan, they operate in a regulatory environment, insulating them from multiple business and financial risks. Moreover, IPPs enjoy tax-free status. IPPs maintain power purchase agreements (PPA), in local scenario, with Central Power Purchasing Agency (CPPA-G) and K-Electric (KE). This ratings covers all major IPPs, including, i) Thermal, including fuel, gas, and coal based, and ii) Renewable including hydel, bagasse, wind, and solar. The magnitude and relevance of risks vary for IPPs at different stages in their lifecycle. For example, for an IPP in its pre-COD stage the completion risk would be in focus. Meanwhile, other things remaining the same, for an operational IPP, performance risk would be in focus while completion risk would not be relevant.