Press Release

VIS Assigns Initial Ratings to Indus Wind Energy Limited

Karachi, March 19, 2021: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of at ‘A-/A-2’ (Single A Minus/A-Two) to Indus Wind Energy Limited (IWEL). 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. Outlook on the assigned ratings is ‘Stable’.
IWEL is a 50 MW wind power project and is virtually a wholly owned subsidiary of Indus Dyeing & Manufacturing Company Limited. The ratings incorporate association of the project company with ‘Indus Group’ which comprises one cotton ginning factory, four yarn spinning mills and one of the largest terry towel factories in Pakistan. Underlying economic risk factors are largely mitigated given signing of the Energy Purchase Agreement (EPA) with ‘take or pay’ provision for 25 years with Central Power Purchasing Agency (Guarantee) Limited (CPPA-G) backed by sovereign government. The company is susceptible to wind risk; however, extensive wind study reflects very low potential risk to the operations. Further, being one of the cheapest sources of energy, the windfarm projects are likely to stay high in the merit list.
The company signed an Implementation Agreement with the Government of Pakistan (GoP), represented through the Alternative Energy Development Board (AEDB) in November 2019. The company was allocated land of 428 acres by the Government of Sindh in Jhimpir, Thatta through a lease agreement in May 2017 and Generation License was granted in August 2017 by the National Electric Power Regulatory Authority (NEPRA). The project will be financed through debt to equity mix of 80:20, where debt comprises an equal mix of local and foreign lenders. IWEL has been able to secure local borrowing through SBP concessionary refinancing scheme. Financial Close was achieved in November 2019 while construction was started in July 2020. Commercial Operations Date (COD) is expected to be achieved in the 1st quarter CY22.
EPC contracts have been signed with Hydrochina International Engineering Company Limited (HIECL) as onshore construction contractor and with Hangzhou Huachen Electrical Power Control Co. Limited as offshore supplier. HIECL is a subsidiary of ‘PowerChina’, one of the biggest construction group 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 while General Electric International Inc. is the long-term O&M contractor. In case of delay in achieving the COD, the EPC contactors will be liable to pay a certain amount of liquidated damages. The company has adequate insurance coverages for cargo, operations, erection, liability, third party and terrorism. Meanwhile, the ratings are sensitive to achievement of commercial operations within stipulated timeframe.
For further information on this rating announcement, please contact Ms. Tayyaba Ijaz at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable rating criterion: Corporates (May 2019)

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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .