Press Release

VIS Reaffirms Ratings of Foundation Wind Energy-I Limited

Karachi, October 14, 2020: 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 June 28, 2019.

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 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 operational risk.

Actual electricity generation of the plant during FY20 & the preceding years have been lower than the benchmark on account of lower wind speed vis-à-vis benchmark; however, the associated risk is passed on to the power purchaser. Plant availability during FY19 & FY20 stood well above benchmark capacity level. Liquidation Damages, in case of non-availability of plant, are completely covered by the O&M contractor. Sales of the company increased significantly on account of higher electricity production and unit price increase which resulted in improved profit margins. Gearing and leverage of the company have improved during the year on account of periodic repayment of borrowings and enhanced equity base. With decline in borrowings and largely improved cash flows, coverages are expected to improve, going forward.

For further information on this rating announcement, please contact Syed Fahim Haider at (042) 35723411-13 or the undersigned at (021) 35311861-66 or email at

Faryal Faheem Ahmed
Deputy CEO

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 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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