Press Release

JCR-VIS Assigns Ratings to Quaid-e-Azam Solar Power (Private) Limited

Karachi, November 17, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘AA-/A-1’ (Double A Minus /A-One) to Quaid-e-Azam Solar Power (Private) Limited (QASPL). Outlook on the assigned ratings is ‘Stable’.

The ratings assigned to QASPL takes into account its ownership profile with Government of Punjab (GoPb) holding 100% stake in the company. The experience of the Engineering, Procurement and Construction & Operations and Maintenance contractor, TBEA Xinjiang Sunoasis Co. Ltd, in executing similar projects in the past largely mitigates the associated operational risk. Project cash flows are a function of tariff defined by NEPRA.

QASPL is part of GoPb initiative to establish a 1,000 MW solar park in Bahawalpur. The company has secured a power generation license from NEPRA for 25 years, lasting till December, 2039. The energy is purchased by Central Power Purchasing Agency (Guarantee) Limited under the Energy Purchase Agreement. As per the implementation agreement, payment obligations of the power purchaser are guaranteed by the Government of Pakistan.

The plant operated at 18.28% capacity with annual production of 160.09 GWh during the first year of operation. The capacity factor of the plant is subject to 0.7% annual degradation. Total energy generated during FY16 surpassed the benchmark energy by 6,792.59 MWh. Total project cost amounted to Rs. 15.2b with debt to equity ratio of 75:25. The company availed a long-term loan facility amounting to Rs. 11.1b with a tenor of 11 years, including a grace period of 1 year. As per the agreement, QASPL is required to maintain a minimum Debt Service Coverage Ratio (DSCR) of 1.25 and minimum current ratio of 1.0. At end-FY16, DSCR was reported 2.75 while current ratio stood at 1.32.

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 2016 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