Press Release

VIS has Assigned Initial Entity Ratings to Burj Clean Energy Modaraba

Karachi, April 28, 2025: VIS Credit Rating Company Limited (VIS) assigns initial entity ratings to Burj Clean Energy Modaraba (“BCEM” or “the Modaraba”) of 'A/A1' (“Single A”/“A One”). Medium to long term rating of 'A' indicates good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A1' indicates a strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The outlook on the assigned ratings is “Stable”.

BCEM is a modaraba managed by Burj Modaraba Management Company (Private) Limited (BMMCPL). It was listed on the Growth Enterprise Market (GEM) Board of the Pakistan Stock Exchange (PSX) in October 2024. Headquartered in Karachi, the Modaraba is primarily engaged in developing and operating distributed renewable energy projects in Pakistan. Its operations include supplying energy through Power Purchase Agreements (PPAs) to commercial, industrial, utility, and residential clients. Other activities comprise leasing renewable energy equipment, investing in clean energy projects, providing energy storage solutions, trading alternative energy products, conducting research and development in sustainable technologies, offering consultancy on energy efficiency, and facilitating the trading of carbon credits and international renewable energy certificates (I-REC).

Assigned ratings of BCEM reflect strength drawn from the profile of its principal sponsor, Burj Energy International Management Limited (BEIML), a Dubai-based entity with global experience in renewable energy development, project financing, and Islamic investment structuring. BEIML’s continued involvement in BCEM is evidenced by the strategic transfer of key assets, including Burj Solar Energy (Pvt.) Limited and JPL Holding Pte. Ltd., which have contributed to early revenue generation and enhanced cash flow stability for the Modaraba. The sponsor group structure also includes BMMCPL, serving as the Modaraba Management Company, and further institutional backing is provided through equity participation by well-regarded domestic financial institutions. The sponsor’s demonstrated support, combined with the operational expertise of BCEM’s management team, provide support to the assigned ratings. Moreover, institutional equity participation by Meezan Bank Limited and Habib Bank Limited (both rated ‘AAA’), enhances the Modaraba’s access to capital and improves the strength of its overall sponsor profile.

Ratings are supported by investments in Pakistan’s renewable energy sector, which presents strong long-term growth prospects. This potential is underpinned by supportive regulatory policies, a steadily increasing demand for energy, and a growing emphasis on sustainable development. The financial risk profile is supported by a stable rental income stream and expected revenues from forthcoming renewable energy projects, with well-secured counterparties. Profitability is further bolstered by dividend inflows from an associated entity operating as an Independent Power Producer (IPP). Operational risk exposure arises primarily from asset performance and maintenance requirements, which are currently managed through preventive maintenance protocols and the engagement of experienced contractors. The capitalization profile reflects a projected increase in debt to finance new business initiatives over the rating horizon. However, management has indicated plans for enhancing equity through accessing capital markets in the medium term, which are expected to provide support to the capital structure.

Going forward, ratings will remain sensitive to the Modaraba’s ability to effectively execute its projected plans and maintain asset quality within acceptable limits. Managing and streamlining leverage will be a key focus, while the planned equity injection is considered essential to strengthen capitalization. Ratings are underpinned by the continued support from the sponsor to meet any financial gaps for the Modaraba, if and when required.

For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.

Applicable Rating Criteria:
Non-Banking Financial Companies
https://docs.vis.com.pk/Methodologies%202024/NBFCs202003.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .