Press Release
VIS Reaffirms Entity Ratings of Artistic Wind Power Private Limited
Karachi, May 12, 2025: VIS Credit Rating Company Limited (VIS) reaffirmed entity ratings of Artistic Wind Power (Private) Limited (“AWPPL” or “the Company”) at 'A/A2' (Single A /A two). 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 'A2' indicates a strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The outlook on the assigned ratings remains “Stable”. Previous Rating action was announced on May 14, 2024.
Incorporated in 2015, AWPPL operates a 50MW wind power plant in Jhimpir, District Thatta, Sindh, spread over 462 acres allocated by the Government of Sindh. The project was set up at a total cost of USD 66.2 million, funded through a debt-to-equity ratio of 80:20, with the debt component equally sourced from local and foreign lenders. The Commercial Operations Date (CoD) was achieved on February 16, 2022. AWPPL has a 25-year Energy Purchase Agreement (EPA) with Central Power Purchasing Agency (CPPA). The offshore EPC contract was awarded to Power Construction Corporation of China Limited (PCCCL), while the onshore EPC was undertaken by HydroChina International Engineering Company Limited (HIEC).
Assigned ratings incorporate the business risk profile of Pakistan’s renewable energy sector, which is assessed as medium, supported by favorable policy incentives, rising energy demand, and natural resource availability. Government policies, including the Alternative and Renewable Energy Policy 2019 and the IGCEP 2047, aim to enhance renewable energy's share in the power mix through competitive bidding and infrastructural reforms. Geographic and climatic conditions, coupled with growing international interest, continue to support sectoral development. Nonetheless, regulatory unpredictability, technological shifts, and high capital intensity pose structural risks. Substitution from conventional energy sources and market entry dynamics remain considerations. Ratings also reflect comfort from the Company’s sponsor profile, comprising Artistic Milliners (Private) Limited, a vertically integrated textile and energy group. Revenue certainty is underpinned by a long-term Energy Purchase Agreement with CPPA-G, backed by sovereign guarantees. Operational reliability is maintained through long-term O&M arrangements with an established international service provider under a defined plant availability commitment.
Assigned ratings also consider the financial risk profile of the Company, including profitability supported by tariff indexation provisions and higher offtakes in the preceding year. Margins have reflected the impact of variations in capacity factor and non-project event compensation under the energy purchase agreement. Capitalization profile reflects a reduction in leverage, driven by internal equity generation and timely debt repayments. The debt portfolio comprises long-term Islamic financing through local financial institutions. No short-term borrowing has been utilized, with operational needs met through internal cash flows. Liquidity indicators reflect some constraints, with improvements noted through short-term investments and retained earnings. Debt coverage metrics show an improving trend on account of revenue adjustments and contractual compensation.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf