Press Release

VIS Reaffirms Entity Ratings of Gharo Solar Limited

Karachi, September 06, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of Gharo Solar Limited (GSL) at ‘A/A-1’ (Single A/A-One). Long Term Rating of ‘A’ reflects good credit quality, adequate protection factors. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-1’ indicates high certainty of timely payment; excellent liquidity factors supported by good fundamental protection factors and risk factors are minor. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on October 27, 2021.

Gharo Solar Limited (GSL) operates a 50 Megawatt (MWp) solar-power plant situated in Gharo area, Thatta, Sindh. Commercial Operations was achieved in Dec’19 whereby no liquidity damage was levied as the project was completed on schedule and estimated budget.

Assigned ratings take into account GSL’s low business risk profile of the Company which draws support from O&M contract placed with well-reputed contractor, OMS Pvt. Ltd, having extensive experience in renewable energy sector. Furthermore, energy purchase agreement of 25 years has been signed with K-Electric along with guaranteed payments through escrow mechanism, which mitigates off-take risk. Ratings also takes weightage of sponsors’ profile comprising local and international players having considerable experience in establishing and running power projects in different countries

Given consistent demand and advanced technology employed, performance of the plant remained above the NEPRA laid performance parameters in FY22. Revenue and profitability levels depicted a slight decline in FY22 due to delay in true-up tariff and inclusion of FY20 revenue in FY21 accounts. Since July’21, tariff indexation takes place on a quarterly basis. The management is working on enhancing the efficiency of the plant by making some technical adjustments, which will help to achieve an even higher output going forward. Overall liquidity profile remains sound on the back of healthy cash flow generation. Leverage levels went up during FY22 due to a rise in the value of dollar based debt and a significant dividend payout. Considering no further drawdown of debt is planned, the projected rise in equity base on the back of higher profit retention is expected to bring these indicators down.

For further information on this rating announcement, please contact Ms. Asfia Aziz (Ext: 212) or the undersigned (Ext. 201) at 021-35311861-70 or email at

Javed Callea

Applicable Criteria: Industrial Corporates (August 2021)

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