Lahore, September 13, 2021 (PPI-OT): Harappa Solar Private Limited an 18MWp Solar Power Plant – incorporated in September 2014, operates under the Renewable Energy Policy 2006. The Company opted for the upfront Tariff. Under the upfront Tariff regime, any variability in solar energy is to be borne by the Company, due to which its cash flows may face seasonality. The ratings, 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 projects.
A long-term energy purchase agreement of 25 years with CPPA-G, mitigating the underlying business and economical risk factors, along with sovereign guarantees on power purchaser’s payment obligation, also contribute positively towards the ratings. Ratings incorporate adherence to performance benchmarks through power generation, underpinned by healthy cash flows generation.
Short-term borrowing levels also reflect a need to oversee the working capital management. The Company has availed both foreign and local loan to finance the debt. Foreign loan, covered through SBLC from local financial institutions, is availed from ECO Trade and Development Bank Turkey. The local loan is received from The Bank of Punjab, Pak Oman Investment Company and Askari Bank Limited.
The Company is required to maintain DSRA equivalent to two debt repayments under financing documents, the Company is funding DSRA from SBLC. The Company has repaid 29% of foreign loan and ~35% of local loan has been repaid, by which the debt equity ratio comes to 66%. Upgrading operational performance in line with agreed performance levels is important. Improvement in inflows and availability of unutilized credit limit remained congenial for the ratings.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
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