Press Release

JCR-VIS Assigns Ratings to Foundation Wind Energy-I Limited

Karachi, April 03, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A+/A-1’ (Sing A Plus /A-One) to Foundation Wind Energy-I Limited (FWEL-I). Outlook on the assigned ratings is ‘Stable’.
The ratings assigned to FWEL-I takes into account its strong ownership profile with Fauji Group, through Fauji Foundation and Fauji Fertilizer Bin Qasim Limited, and IIF Wind One Limited (CapAsia) being the major sponsors of the company. The project is established under the Policy for Development of Renewable Energy for Power Generation, 2006 which offers a guaranteed internal rate of return, cost indexation and pass-through tariff structure. Moreover, presence of reputable operational and maintenance contractor carrying sound track record in wind energy mitigates the associated operational risk.
The energy is purchased by National Transmission and Dispatch Company (NTDC) through its Central Power Purchasing Agency under the Energy Purchase Agreement; payment obligations of the power purchaser are guaranteed by the Government of Pakistan. With power generation operation of the plant approaching two years, actual electricity generation of the plant has been lower than the benchmark generation due to lower wind; however the associated risk is passed on to the power purchaser. Moreover, the risk of non-evacuation also rests with the power purchaser.
Total project cost amounted to Rs. 12.9b arranged through 75% debt and 25% equity contribution. Debt is repayable over a period of 10 years ending January, 2024. Project cash flows are a function of tariff defined by NEPRA. The company’s profitability draws support from high margins while funds from operations are projected to meet future debt obligations.
For further information on this rating announcement, please contact the undersigned at 021-35311861-70 (Ext: 234) or Mr. Waqas Munir, FRM at 042-35723411-13 (Ext: 8010).

Javed Callea

Applicable Rating Criteria: Industrial Corporates (May 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2017 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

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