Harappa Solar Private Limited (“Harappa Solar” or “Company”) has established an 18 MWp solar power plant near Harappa Bypass, Tehsil and District Sahiwal, Punjab, under Pakistan’s Renewable Energy Policy 2006. This facility is notable for being Pakistan’s first single-axis tracking solar plant, which enhances efficiency by following the sun’s movement across the sky. The plant’s configuration includes twenty-four (24) central inverters of 630 kW each and twelve (12) transformers rated at 1500 kVA. After accounting for auxiliary consumption, the net rated capacity of the plant is approximately 17.305 MW.

Harappa Solar opted for the Upfront Tariff mechanism offered by NEPRA for solar power projects and was granted a levelized tariff of 11.5327 US¢ per kWh for a period of 25 years. This tariff covers key cost components including operations and maintenance (O&M), insurance, return on equity (ROE), and debt servicing. The tariff is structured into two phases: 14.0604 US¢ per kWh for the first 10 years and 6.2363 US¢ per kWh for the remaining 15 years, averaging out to the approved levelized rate. Unlike thermal power plants, which receive both energy and capacity payments, Harappa Solar will receive only energy payments, making it a performance-based model aligned with the variable nature of solar power generation. The revised tariff for the April to June 2025 quarter has been notified at PKR 29.2691 per kWh, based on prevailing exchange rates and indexation adjustments.

The ROE of Harappa Solar project, as agreed with NEPRA, is 17%.

Harappa Solar (Pvt.) Ltd features a balanced ownership: Rana?Nasim?Ahmed holds a commanding majority with 75%, while local investor Mr.?Khaqan?Babar?Cheema possesses 12%, and Sri Lankan-based foreign investor WindForce (Pvt.) Ltd retains 12.8%, combining strong individual leadership with strategic foreign backing.

Stability in Harappa Solar (Pvt.) Ltd, like other Independent Power Producers (IPPs), is ensured through long-term contractual agreements with the power purchaser. The Energy Purchase Agreement (EPA) spans 25 years, offering predictable revenue over the project’s lifecycle. Additionally, the Implementation Agreement with the government provides a sovereign guarantee for payment security, safeguarding cashflows as long as the company meets agreed performance benchmarks. This framework minimizes financial risk and enhances investor confidence in the project’s long-term viability.

The sponsors of Harappa Solar bring strong business acumen, combining local and international expertise with a proven track record of developing over 300?MWp of renewable energy projects across multiple countries. Their hands-on experience in commissioning, operating, and managing power plants ensures technical competence, operational reliability, and strategic insight, which have been critical to the successful execution and long-term sustainability of the Harappa Solar project.

Harappa Solar benefits from strong financial backing, with sponsors possessing a solid capital base and a history of successful infrastructure investments. The involvement of Windforce (Pvt.) Limited, a well-established foreign investor with a robust financial profile, further enhances the project’s credibility and financial stability. This combination of local and international financial strength provides long-term assurance to stakeholders and supports the project’s ongoing operational and financial performance.

Harappa Solar’s Board of Directors consists of eight members, including the CEO. Seven of these directors are nominated by the major sponsors, reflecting strong sponsor oversight. The CEO serves as the sole executive director, while the remaining members are non-executive, ensuring governance and strategic supervision. The Board is chaired by Rana Nasim Ahmed, the majority sponsor, reinforcing leadership alignment with the company’s long-term vision.

Mr. Rana Nasim Ahmed, Chairman of Harappa Solar’s Board and its main sponsor, brings over two decades of leadership in the energy and industrial sectors. As COO and Resident Director of JDW Sugar Mills since 2001, he played a key role in transforming it into one of Pakistan’s leading sugar enterprises. He pioneered high-pressure bagasse-based cogeneration IPPs and contributed significantly to shaping national policy and regulatory frameworks for renewable energy. Mr. Ahmed also sponsors Gharo Solar, a 50?MWp solar project near Thatta, further demonstrating his commitment to clean energy development in Pakistan.

Harappa Solar’s Board operates without formal Board committees, with all oversight functions managed collectively by the full Board. Despite the absence of specialized committees, the company ensures transparency and accountability by maintaining proper documentation through well-recorded Board meeting minutes, supporting effective governance and decision-making.

BDO Ebrahim & Co. Chartered Accountants, currently rated in Category “A” on the State Bank of Pakistan’s panel of auditors, serves as Harappa Solar’s external auditor. They issued an unqualified opinion on the company’s financial statements for the year ended June 30, 2024, and the audit for FY2025 is currently in progress.

Harappa Solar has a flat organizational structure common to IPPs, with a streamlined team focused on finance and technical oversight. Core functions—including engineering, construction, and plant operations—are outsourced to specialized firms, allowing for efficient resource utilization and expert-driven project execution.

Harappa Solar’s management team is led by CEO Rana Uzair Nasim, who played a pivotal role in the project’s development from incorporation to financial close and operational launch. A graduate in Economics with a Master’s in Management Science & Engineering from Stanford University, Mr. Uzair brings strong academic credentials and hands-on experience in renewable energy. He was actively involved in the successful execution of JDW Sugar Mills’ bagasse-based power projects and briefly worked as a financial advisor in the U.S. He is supported by a team of experienced and capable professionals overseeing the company’s operations and performance.

The management’s role in an IPP is confined largely to financial matters and regulatory interaction. The management tier ensures effective delegation of functional responsibility across various departments, facilitating a smooth flow of operations.

Harappa Solar takes advantage of advanced I.T. solutions to deliver comparatively better on many fronts.

Harappa Solar has a 25-year Energy Purchase Agreement (EPA) with the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G). Under this agreement, the project receives only energy payments based on actual electricity supplied to the grid, unlike thermal plants that receive both energy and capacity payments. This structure aligns with the nature of solar generation and ensures payments are directly tied to performance and output.

Harappa Solar has entered a three-year Operation and Maintenance (O&M) contract with OMS (Pvt.) Limited, ensuring professional oversight of the plant’s performance. The contract includes a provision allowing the O&M team a 12-hour non-sunlight window to resolve any equipment malfunctions, providing flexibility to address issues efficiently while minimizing downtime. This arrangement supports reliable plant operations and sustained energy generation.

Resource risk for Harappa Solar primarily involves variations in solar irradiation and temperature, which directly impact energy generation. To mitigate this, the plant uses single-axis tracking technology that optimizes the capture of sunlight throughout the day, enhancing efficiency and helping to reduce the impact of fluctuating solar resources. This technology improves the plant’s ability to maximize energy output despite natural variability in weather conditions.

Harappa Solar maintains comprehensive insurance coverage, including material damage, third-party liability, and delay in startup that could impact project profitability. Additionally, the EPC contract includes specific performance benchmarks. If the actual performance ratio falls below the agreed threshold, the EPC contractor is liable to pay liquidated damages, providing financial protection and ensuring accountability for underperformance.

As of FY24, Pakistan's total installed power generation capacity reached approximately 45,888?MW, reflecting a modest year-over-year (YoY) increase of 0.3%. However, actual power generation declined by around 0.6% YoY to 15,662?MW, resulting in an average capacity factor of 34.1%, slightly down from 34.4% in FY23. This relatively low capacity factor signals inefficiencies in utilizing the installed capacity. The generation mix remained dominated by thermal sources (~25,490?MW), followed by hydel (~10,635?MW), nuclear (~3,620?MW), and renewables (~2,767?MW), with renewables posting a 5.7% YoY growth. The renewable segment included 36 wind projects (1,838?MW) and 7 solar projects (680?MW). Dependable capacity fell by about 7% to 40,667?MW, largely due to declines in thermal and nuclear capacities. Public sector power plants accounted for 61.4% of total generation in FY24, up from 51% in FY23, while the private sector’s share dropped to 38.6%. CPPA-G was the major power offtaker, contributing 93% of the total generation, with K-Electric covering the remaining 7%. These dynamics underscore the sector's growing reliance on renewables and highlight the challenges in efficiency and capacity utilization across the power value chain.

The Annual Benchmark electricity generation for Harappa Solar based on 17% Capacity Factor is 26,806 MWh. The Company has generated 28,009 MW of electricity during 3QFY25 (3QFY24:27,017MW, FY24: 30,397MW, FY23: 31,475MW, FY22: 31,216MW).

Under the Energy Purchase Agreement, Harappa Solar is required to maintain a minimum plant availability of 90%. During 3QFY25, the plant exceeded this benchmark, achieving an average availability of 99%, demonstrating strong operational performance.

Harappa Solar’s project is primarily debt-financed, with 75% of the total cost—approximately USD 18 million—funded through loans. The foreign currency debt of USD 8.2 million is provided by the ECO Trade and Development Bank with a 10-year tenure and quarterly repayments. Local debt facilities totaling PKR 996 million involve The Bank of Punjab, Askari Bank, and Pak Oman Investment Company. The equity investment stands at around USD 6 million. By March 2025, the company had successfully repaid thirty installments on both local and foreign loans. The financing agreement requires maintaining a Debt Service Reserve Account (DSRA) equivalent to two debt repayments, currently supported by a sponsor-backed Standby Letter of Credit (SBLC), with plans to fund it internally in the future. Additionally, the project’s tariff structure includes a provision to adjust rates upward with any increase in the US dollar’s exchange rate, protecting revenue against currency fluctuations.

As of 3QFY25, Harappa Solar’s total receivables stood at PKR 233 million, showing improvement from PKR 321 million in 3QFY24 (FY24: PKR 283 million, FY23: PKR 371 million). Gross working capital days reduced to 111 days as of March 2025, compared to 153 days in 3QFY24 (FY24: 129 days, FY23: 254 days), driven by a decline in receivable days. However, with circular debt remaining a systemic issue in the power sector, IPPs like Harappa Solar continue to rely on short-term borrowings to manage liquidity requirements.

As on 3QFY25, the Company has a working capital line of PKR 325mln; as of March 2025, it has utilized PKR 317mln, resulting in a utilization of 98%.

During 3QFY25, free cash flows from operations (FCFO) stood at PKR 475mln as compared to PKR 481mln in 3QFY24 (FY24:PKR742mln, FY23: PKR 347mln, FY22: PKR 297mln). Coverages have been slightly increasing due to partly due to decreased in finance cost  [3QFY25:?5.1x, 3QFY24:3.7x, FY24: 4.4x, FY23: 2.3x, FY22: 3.0x).

As of 3QFY25, it has repaid ~72% of the local loan and  foreign loan, reducing the leverage ratio to 50.9% (3QFY24: 57.4%, FY24: 52.8%, FY23: 60%, FY22: 62%, FY21: 66%).