Karachi: VIS Credit Rating Company Limited has elevated the credit ratings of Gharo Solar Limited, reflecting the solar power company’s robust operational and financial metrics. The medium to long-term rating was lifted from ‘A’ to ‘A+’, indicating good credit quality with adequate protection factors, while the short-term rating was maintained at ‘A-1’, suggesting a strong likelihood of timely repayment obligations.

According to VIS Credit Rating Company Limited, the upgrade reflects the solid business risk profile and financial stability of Gharo Solar Limited. Established in 2016, the company operates a 50 MW solar PV power plant in Gharo, District Thatta, Sindh, under a 25-year Energy Purchase Agreement with K-Electric. This agreement includes a ‘must run’ provision, exempting the plant from merit order and allowing it to operate on a cost-plus tariff with a guaranteed 15% return on equity.

The company benefits from a strong ownership structure, led by principal sponsor Mr. Rana Ahmed and supported by Windforce (Pvt.) Ltd and Norsk Solar, who are well-versed in renewable energy projects. This, coupled with an experienced O and M contractor, significantly mitigates operational risks.

VIS also noted GSL’s improved profitability, driven by tariff adjustments and revenues from short-term investments. Despite a high debt-to-equity ratio, the company’s capital and liquidity profiles have been bolstered by stable dividend payouts and growth in operations funding, which are supported by a Debt Service Reserve Account and investments in mutual funds. The ratings outlook remains stable, hinging on continued guaranteed offtake by K-Electric and sustained operational performance.