Press Release

VIS Reaffirms Entity Ratings of NASDA Green Energy Limited (NGEL)

Karachi, August 08, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of NASDA Green Energy Limited (NGEL) at ‘A-/A-2’ (Single A Minus/A-Two). Medium to long-term rating of ‘A-’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in economy. Short term rating of ‘A-2’ indicates good certainty of timely payment supported by sound liquidity and company fundamentals. Access to capital market is good and risk factors are small. Outlook on the assigned ratings remains ‘Stable’. Previous rating action was announced on February 08, 2022.
NGEL is a 50MW wind power complex located at Jhimpir District, Thatta. The assigned ratings take into account low business risk profile underpinned by signing a 25-year long energy purchase agreement (EPA) with the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G). The wind power projects (WPPs) have been facing curtailments primarily on account of capacity constraints at national grid level amidst availability of cheaper alternative power sources and the requirement to maintain a base load. Therefore, NGEL was unable to meet the annualized targeted capacity factor due to curtailments after coming online on May 2, 2022. Adequate margins could not be sustained in 9MFY23 owing to massive local currency depreciation against a significantly lower reference tariff. This, along with augmentation in finance cost led to net losses in 9MFY23. The project company has filed for determination of true-up tariff with National Electric Power Regulatory Authority (NEPRA), and expects it to be finalized in a year time. Meanwhile, interim relief from NEPRA is expected to be implemented soon, which will support the profitability profile of the company till finalization of true-up tariff.

The liquidity profile is supported by timely recovery of receivables from CPPA-G. Trade debts are secured by a guarantee from the GoP under the Implementation Agreement (IA). The quarterly repayments of financing facilities have been commenced from Jun’22. Cash flows have remained under pressure as a result of weakening in profitability profile. However, comfort is drawn as the company has maintained a standby letter of credit (SBLC) equal to two quarterly installments for the entire loan term as per financing agreements. The project was financed through debt-to-equity ratio of 80:20. Moreover, as the company’s core equity eroded due to losses, gearing and debt leverage have remained elevated. Going forward, leverage indicators are expected to improve steadily over time on account of repayments of long-term loans and growth in equity base backed by enhanced internal capital generation. The ratings are dependent upon timely resolution of the true-up tariff and availability of timely interim relief from NEPRA to support the financial risk profile of the company.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz, CFA at 042-35723411-13 (Ext. 8001) and/or the undersigned at 021-35311861-66 (Ext. 207) or email at

Sara Ahmed

VIS Entity Rating Criteria: Industrial Corporates (May 2023)
Rating Scale and Definitions:

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