Press Release

VIS Reaffirms Entity Ratings of Atlas Solar Limited (Formerly: Zhenfa Pakistan New Energy Company Limited)

LLahore, December 26, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Atlas Solar Limited (Formerly: Zhenfa Pakistan New Energy Company Limited) (ASL) at ‘A/A-2’ (Single A/A-Two). Medium to long term rating of ‘A’ signifies good credit quality with adequate protection factors. Risk factors may vary with possible changes in the economy. Short term ratings of ‘A-2’ denotes good certainty of timely payment. Liquidity factors and company fundamentals are sound. Risk factors are small. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on December 27, 2022.

The ratings assigned to ASL 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. During FY23, Atlas Power Limited (APL), the holding company, purchased 20% shares from Zhenfa Energy Group Co., Ltd. Subsequently, the company’s name was changed to ‘Atlas Solar Limited’ from ‘Zhenfa Pakistan New Energy Company Limited’ on January 11, 2023.

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 plant must run under no merit listings due to solar power being a renewable resource. The ratings take into account sound operating metrics of the plant and significant growth in revenue since achieving commercial operations date (COD) on April 14, 2022. Currently, the billing of the company is being made on interim tariff; however, all components will be adjusted in true-up tariff. The application for finalization of tariff was sent to NEPRA in November 2022; the tariff is expected to be finalized during Jan’24.

Despite considerably higher net sales, net profit was restricted owing to a sizeable increase in depreciation expense and financial charges during FY23. Liquidity indicators remained range bound despite higher FFO during FY23. Liquidity risk is considered manageable on account of intermittent payments by the CPPA-G and the working capital facilities available. Despite enhanced equity base, leverage indicators remained elevated due to devaluation of parity of PKR/USD. Short-term borrowing increased mainly to fund contract assets while translation of foreign currency debt led to higher long-term borrowings. The ratings are sensitive to implementation of the true-up tariff at a higher rate than interim tariff.

For further information on this rating announcement, please contact the undersigned at 042-35723411-12 (8008) or email at

Maimoon Rasheed

Applicable Rating Criteria: Industrial Corporates (May 2023)

VIS Issue/Issuer Rating Scale

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