Press Release

VIS Reaffirms Entity Ratings of Foundation Wind Energy-I Limited

Karachi, June 28, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Foundation Wind Energy-I Limited (FWEL-I) at ‘A+/A-1’ (Single A-Plus/A-One). The long-term rating of ‘A+’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A-1’ denotes high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on August 07, 2018.

The assigned ratings of FWEL-I incorporate its strong ownership profile vested with Fauji Group, through Fauji Foundation and Fauji Fertilizer Bin Qasim Limited, holding major stake in the company. IIF Wind One Limited (CapAsia) is the other sponsor of the company. Given the project is established under the Policy for Development of Renewable Energy for Power Generation, 2006, the ratings derive strength from guaranteed internal rate of return, cost indexation and pass-through tariff structure. Ratings of the company also draw support from cover against wind risk and power evacuation risk. In addition, presence of reputable operational and maintenance (O&M) contractor carrying sound track record mitigates the associated operational risk.

Actual electricity generation of the plant during FY18 & the ongoing year have been lower than the benchmark on account of lower wind speed vis-à-vis benchmark and grid outrages; however, the associated risk is passed on to the power purchaser. Plant availability during FY18 & 9MFY19 stood well above benchmark capacity level. Liquidation Damages, in case of non-availability of plant, are completely covered by the O&M contractor. The company renewed its O&M contracts during FY18 and entered into a further three year contract with effect from August 8, 2017. Gearing and leverage of the company have improved on a timeline basis on account of periodic repayment of borrowings and enhanced equity base. With decline in borrowings and largely stable cash flows, coverages are expected to improve, going forward.

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: Corporates (May, 2019)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited