Press Release

VIS Reaffirms Entity Ratings of Gharo Solar Limited

Karachi, August 11, 2020: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Gharo Solar Limited (GSL) at ‘A-/A-2’ (Single A-Minus/A-Two). The medium to long-term rating of ‘A-’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on May 03, 2019.

The ratings assigned to GSL take into account sound profile of sponsors having considerable experience in establishing green-field projects in power and industrial sectors and also operating a portfolio of solar and small hydro projects. The ratings draw comfort from the fact that underlying economic risk factors are largely mitigated by long-term energy purchase agreement of 25 years with K-Electric. Being a private electricity transmission company, K-Electric has sound track record of timely payments to various thermal IPPs. The company achieved Commercial Operations in December 2019, whereby no liquidated damages were levied as the project was completed on schedule and within budget. While GSL is currently receiving energy payments at a reference tariff, it is in the process of filing tariff indexation request with NEPRA. In case approval for indexed tariff takes longer than expected, the company may utilize excess cash to repay borrowings. However, timely approval of indexed tariff is considered imminent for the project’s financial viability. Meanwhile, gearing stood in a ratio of 75:25 as per the project’s financing terms, which is expected to decrease with scheduled debt repayments.

For further information on this rating announcement, please contact Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at 021-35311861-70 (Ext. 201) or

Faryal Faheem Ahmed
Deputy CEO

VIS Entity Rating Criteria Industrial Corporate (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 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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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