Kot Addu Power Company Limited (KAPCO) conducted its analyst briefing earlier today to present investors with updates on their FY24 results and offer insights into the future outlook:
- KAPCO is the sole multi-fueled fired power plant (LSFO, Gas/RLNG and HSD), with a nameplate capacity of 1,600MW. In FY24, the company generated zero units due to expired PPA in Oct’22 vs. 588GWh in FY23 (load factor: 4.2%).
- The company is currently in the process of renewing its PPA for the 500MW section of its plant.
- The company has applied for a seven-year extension for its generation license, which expired in Sep’24.
- KAPCO (500MW) was included in NEPRA’s power acquisition plan until 2027 due to system constraints and its significance in the national grid (main link with transmission line, black-start facility, and location benefit). Hence, the company has filed for a new tariff on a take-or-pay basis for the 500MW capacity, while the remaining capacity may either continue under the take-and-pay model or be dismantled.
- The company plans to file for a separate tariff for its switchyard facility (220KV to 132KV line), which the power purchaser has been using for the past two years. Management expects this usage to continue indefinitely to ensure continuity of supply to MEPCO.
- The company has retained PkR47bn in cash in mutual funds for diversification in green/brownfield projects. However, the company did not succeed in the Tenaga Generasi bidding round (Wind Power 49.5MW).
- The company has placed bids for K-Electric’s solar greenfield projects (120MW in Halkani and 150MW in Metha Ghar). Management is targeting double-digit ROE at a minimum for these new projects.
- The company plans to export 60k tons of furnace oil, with the process to be completed in the coming months.
- The company launched the VSS scheme this year to downsize employees in accordance with the requirements of the 500MW plant, which has been successfully achieved.
- Management expects the Competitive Trading Bilateral Contract Market (CTBCM) to come online within the next 1-1.5 years. The delay is primarily due to issues on the DISCOs’ side, particularly finalizing the wheeling charges.
- KAPCO would benefit due to its 47% efficiency under a take-and-pay scenario, which is significantly higher than that of the next closest plant, PakGen Power (efficiency: 38%).
Courtesy – AKD Research
