Press Release

JCR-VIS Assigns Ratings to Foundation Wind Energy-II (Pvt.) Limited

Karachi, February 16, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A+/A-1’ (Single A Plus /A-One) to Foundation Wind Energy-II (Pvt.) Limited (FWEL-II). Outlook on the assigned ratings is ‘Stable’.

The ratings assigned to FWEL-II take into account its strong ownership profile with Fauji Group, through Fauji Foundation and Fauji Fertilizer Bin Qasim Limited, holding major stake in the company. IIF Wind Two Limited (CapAsia - a Malaysian private equity firm) and Tapal Group are the other 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 mitigates the associated operational risk.

The energy is purchased by National Transmission and Dispatch Company Limited through its Central Power Purchasing Agency (Guaranteed) Limited 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 is in process since end-2014, 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 US$ 126.6m. The project had been financed by 72% debt and 28% equity. Debt financing was arranged through a forward lease agreement with Islamic Development Bank, payable in 19 semiannual installments starting from January 2015. Going forward, FFO is projected to remain stable on an annual basis while the same is expected to remain sufficient for timely debt repayment.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.

Javed Callea

Applicable Rating Criterion: Industrial Corporate (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 2018 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited