Press Release

VIS Upgrades Entity Ratings of Zhenfa Pakistan New Energy Company Limited

Karachi, December 27, 2022: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Zhenfa Pakistan New Energy Company Limited (ZPNECL) to ‘A/A-2’ (Single A /A-Two) from A-/A-2’ (Single A Minus/A-Two). The medium to long-term rating of ‘A’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamentals and liquidity factors. Access to capital markets is good. Risk factors are small. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 03, 2021.
The ratings assigned to ZPNECL incorporate the company being a part of ‘Atlas Group’ which is one the biggest and renowned conglomerates in the country with business interests in automobiles, batteries, insurance, asset management, trading and energy. The ratings take into account the company’s low business risk profile underpinned by inking of energy purchase agreement with the Central Power Purchasing Agency (Guarantee) Limited with the inbuilt ‘take or pay’ provision for a period of 25 years. The project is financed through debt to equity mix of 80:20, where debt matrix comprises around three-fifths of foreign funding while the remaining was contributed by country’ leading commercial bank. The Construction Contract is signed with Hydrochina International Engineering Company Limited (HIECL) as onshore construction contractor while Hangzhou Huachen Electrical Power Control Co. Limited is the offshore supplier. HIECL is a subsidiary of ‘PowerChina’, one of the biggest construction groups in the power sector with engagement in over 100 countries. HIECL is also the O&M contractor for the initial two years of warranty period. Moreover, HIECL as the O&M operator, is also obligated to pay LDs if the plant is unable to maintain benchmark availability. The company has adequate insurance coverages for cargo, operations, erection, liability, third party and terrorism. The long-term rating upgrade is underpinned by elimination of construction risk as the project achieved commercial operations on 14th April,2022. Going forward, upholding operational performance in line with agreed performance levels would remain a key rating driver.
For further information on this rating announcement, please contact Ms. Maham Qasim (042-35723411-13, Ext. 8010) and/or the undersigned at 021-35311861-66 (Ext. 207) or email at

Sara Ahmad

Applicable rating criterion: Corporates (August 2021)

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