Press Release

VIS Reaffirms Entity Ratings of Artistic Energy (Pvt.) Limited

Karachi, April 18, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings assigned to Artistic Energy (Pvt.) Limited at ‘A+/A-1’ (Single A Plus/A-One). The medium to long-term rating of ‘A+’ reflects good credit quality, protection factors are adequate. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A-1’ indicates high certainty of timely payment, Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on March 29, 2022.

AEPL operates a 49.3MW wind power farm in Jhimpir, District Thatta, Sindh. AEPL’s assigned ratings incorporate satisfactory operating track record of AEPL, adequate financial profile and low exposure to business risk. AEPL is a wholly owned subsidiary of Artistic Milliners (Pvt.) Limited (AMPL). The assigned ratings also incorporate sound financial profile of sponsor.

Business risk profile draws support from long-term Operations & Maintenance (O&M) contract in place with experienced O&M operator. The presence of long-term EPA with guaranteed capacity payments mitigates off-take risk while adequate insurance coverages are also in place. However, during 1H’FY23, curtailments from National Transmission & Dispatch Company (NTDC) resulted in less offtake from AEPL, which led to lower capacity factor during the same period. AEPL among several other wind power projects have been facing curtailments since Oct’22, which according to NTDC has been due to availability of relatively cheaper power sources amid excess power generation in winter season. Nonetheless, the company will be paid Non-Project Missed Volumes (NPMV) in case Central Power Purchasing Agency (CPPA) purchases less than the contract capacity during off-peak season. 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.

Lower profitability during H1’FY23 led to decline in funds from operations (FFO) and resultant decrease in cash flow coverages. The same is expected to improve in full year in line with increase in profitability on the back of higher offtake. Nonetheless, debt repayments have been accounted in approved tariff implying adequate debt service coverage. In addition, receivables collection from CPPA has remained robust since last year as the same have been duly cleared at the end of each quarter. The assigned rating remains dependent on maintenance of business and financial risk metrics in line with benchmark for the assigned rating.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz, CFA (042-35723411-13, Ext. 8005) and/or the undersigned at 021-35311861-4 (Ext. 207) or email at

Sara Ahmed

Applicable rating criterion: Corporates (August 2021)

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 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .