Press Release

VIS Credit Rating Company Reaffirms Entity Ratings of Artistic Wind Power (Pvt.) Limited

Karachi, March 16, 2021: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings to Artistic Wind Power (Pvt.) Limited (AWPPL) of ‘A-/A-2’ (Single A Minus/A-Two). Long term rating of ‘A-’ indicates good credit quality; adequate protection factors. Risk factors may vary with possible changes in the economy. Short term rating of ‘A-2’ denotes god certainty of timely payment; sound liquidity factors and company fundamentals. Access to capital markets is good. Risk factors are small. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on March 16, 2020.

AWPPL plans to set up a 50MW wind power plant in Jhimpir, District Thatta, Sindh. It is a wholly owned subsidiary of Artistic Milliners (Pvt.) Limited (AMPL). The assigned ratings incorporate sound financial profile of sponsor. The total cost of the project has been estimated at $66.2m which shall be financed in debt to equity ratio of 80:20 where debt component will comprise an equal (50:50) mix of local and foreign lenders. The financial close for this project has been achieved in November 2019. Plant Off-take connectivity is expected to be with Jhimpir-2 Interconnection facility which is under construction and is projected to be completed by September 2021. The targeted commercial operations date is expected is October 2021 while construction of the project has already commenced. The project has an estimated ROE of 14%.

Business risk profile draws support from long-term Operations & Maintenance (O&M) contract in place with experienced O&M operator. Presence of long term EPA with guaranteed capacity payments mitigates off-take risk while insurance coverages are in place. While power produced and in turn cash flows are susceptible to seasonality and possible variance in wind speed, comfort is drawn from surveys conducted by international consultants confirming adequate wind availability historically. Ratings incorporate inherent construction and project completion risk; however the same is partly mitigated by in-built guarantees and liquidated damages the operation of which would materialize during construction. Timely project completion will remain an important rating driver.

Assessment of financial risk profile take into account sound projected debt coverage metrics; however, inconsistent payment cycle exhibited by CPPA may translate into some liquidity pressures. Moreover, to facilitate timely debt servicing, the Company will give a 6 month SBLC to lenders to ensure timely repayment. The assigned ratings incorporate elevated leverage indicators in line with project funding mix. Leverage indicators are expected to improve over time owing to debt repayments and internal capital generation and are captured in the assigned ratings.

For further information on this rating announcement, please contact Ms. Asfia Aziz or the undersigned (Ext. 306) at 021-35311861-70 or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates (April 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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited