Lahore, April 04, 2022 (PPI-OT):Quaid-e-Azam Solar Power (Pvt.) Limited (QASPL) is operating a 100MW Solar Power Plant – set up by the Government of Punjab (GoPb), and commenced its operations in Jul-15 and operates under the Renewable Energy Policy 2006. The Ratings take into account the association of GoPb. A long-term energy purchase agreement of 25 years with CPPA-G, mitigating the underlying business and economic risk factors, along with sovereign guarantees on power purchaser’s payment obligation, which also contributes positively towards the ratings.

Comfort is drawn from TBEA Xinjiang Sunoasis Company Ltd. – the O and M operator having international experience. Free cash flows of the Company are in a comfortable position to make debt repayments. QASPL has repaid ~51% of its debt on time, facet of strong financial profile and sound working capital management which currently are fulfilled through internal cash flow generation. This generation ability provides strength to the company and creates room for further expansion, which the management is already considering. Ratings incorporate adherence to performance benchmarks through power generation, underpinned by healthy cash flows generation.

Upholding operational performance in line with agreed performance levels is important. Improving, indeed aligning, receipt pattern from power purchaser, debt repayment behaviour and liquidity cushion would impact the directions of ratings. External factors such as any adverse changes in the regulatory framework and weakening of financial profile may impact negatively.

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
Website: www.pacra.com