Press Release

VIS Reaffirms Entity Ratings of Yunus Energy Limited

Karachi, April 04, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings assigned to Yunus Energy Limited (YEL) 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 April 1, 2022.

YEL operates a 50-Megawatt (MW) wind power farm, located at Jhimpir-Hyderabad corridor. The plant comprises 20 Wind Turbine Generators (WTGs), each with a nameplate capacity of 2.5 MW. YEL commenced commercial operations in September’2016. A consortium of NORDEX Pakistan (Private) Limited and Descon Engineering Limited is providing Operations & Maintenance (O&M) services and is expected to remain the plant’s O&M contractors till the debt financing is totally retired.

The assigned ratings incorporate satisfactory operating track record since commercial operations, low business risk and adequate financial risk profile. YEL is a part of Yunus Brother Group (YBG), a reputable conglomerate with strong financial profile and presence in diversified sectors including power generation, building materials, real estate, textile, chemicals, pharmaceuticals, food and automotive sectors. Further, contractual commitment of the sponsor to fund any shortfall in the debt payment account provides comfort to the assigned ratings.

The business risk profile draws support from long-term Operations & Maintenance (O&M) contract in place with experienced O&M operator and track record of compliance with normative parameters stipulated in Energy Purchase Agreement (EPA) since commencement of operations. YEL will continue to receive the revenues under Non-Project Missed Volume, which is compensation for loss of revenue due to Non-Project Events, solely attributable to power purchaser. However, YEL and several other wind power projects (WPPs) have been facing curtailments since Nov’22, as they fall behind in economic merit order list to some other projects as these WPPs were awarded tariff under different regime. In February 2021, power producers were offered an agreement with offtaker for revised tariff featuring a lower RoE, lower O&M component among other adjustments, vis-à-vis the initial agreement with CPPA, against settlement of full dues by GoP. YEL has not taken any decision in this regard so far.

Assessment of financial risk profile incorporates sound debt coverage metrics and healthy cash flows, in relation to outstanding obligations. Gearing and leverage ratios have improved on a timeline basis. Even though YEL’s operations are susceptible to liquidity risk, given availability of borrowing lines and association with YBG, liquidity risk is considered manageable. Ratings remain dependent on maintaining satisfactory operating track record while maintaining leverage and liquidity indicators at comfortable level over the rating horizon.

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 .