Press Release

VIS Upgrades Entity Ratings of Zephyr Power Limited

Karachi, February 02, 2023: VIS Credit Rating Company Limited (VIS) has upgraded entity rating of Zephyr Power Limited (ZPL) to ‘A+/A-1’ (Single A Plus/A-One). Long Term Rating of ‘A+’ reflects good credit quality; protection factors are adequate. Risk is moderate but may vary slightly from time to time because of economic conditions. Short term rating of ‘A-1’ indicates high certainty of timely payments; Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned ratings is ‘Stable’. Previous rating was announced on December 31, 2021.

Incorporated as a private limited company in 2005 and later converted into a public unlisted company in June 2021, Zephyr Power Limited (“Company”) principally operates a Wind Independent Power Project (IPP) with 25 Wind Turbine Generators (WTGs) located in Gharo, Thatta, Sindh. The IPP interconnection is connected to the national grid which is maintained and operated by the National Transmission Despatch Company (NTDC). The Company has signed an Energy Purchase Agreement (EPA) with the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G). Commercial Operations was achieved in Mar’19 while takeover by management from EPC contractor was completed in Oct’19.

Rating upgrade takes into account smooth operational performance of the project and relative positioning vis-a-vis peers. Assigned ratings also incorporate strong profile of primary sponsor, represented by foreign investment by a Development Finance Institution (DFI) wholly owned by UK Government. The remaining sponsors comprise of a consortium of local partners contributing through equity and management. Ratings also draw comfort from presence of Debt Service Reserve Account (DSRA) and CPPA-G’s commitment of timely payment of receivables for debt servicing which continues to provide comfort to the ratings. In addition, presence of (20 years) long-term Energy Purchase Agreement (EPA) with CPPA-G mitigates off-take risk while adequate insurance coverage is also in place. Moreover, operational risk remains minimal given O&M contractor’s track record of international experience, and fulfillment of obligations towards the company till date.

During FY22, the Company witnessed a rebound in operating performance with the capacity factor improving to 46.86% (FY21: 37.16%). With the increase in net revenues in FY22, gross and operating margins has also rebounded to FY20 levels. Debt servicing remained satisfactory with liquidity profile and sufficient internal cash for working capital management. Till date, CPPA-G continues to make payments within manageable timeframe, however, any payment delays in the future may lead to some liquidity pressure. Capitalization indicators depicted improvement in FY22 on account of increase in equity base. Gearing and leverage levels are expected to remain low over the rating horizon on account of expected profitability and minimal capex plans going forward.

For further information on this rating announcement, please contact Mr. Amin Hamdani (Ext: 217) or the undersigned (Ext. 207) at 021-35311861-70 or email at

Sara Ahmed

Applicable Criteria: Industrial Corporates (August 2021)

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