Meridian Energy Limited (“Meridian” or “the Company”) was established as a private limited company under the repealed Companies Ordinance, 1984 (currently the Companies Act, 2017) on April 28, 2015. The Company transitioned to a public unlisted company on December 30, 2021. Its primary business activity is the development, ownership, operation, and maintenance of a 50MW solar power plant located in Goth Gagrawara, Taluka Saleh Pat, District Sukkur. The plant commenced commercial operations (COD) on January 19, 2024. The Company’s registered office is located at G-30/4, KDA Scheme, Clifton, Karachi.

Meridian was awarded a reference tariff of PKR 6.7532 and cost-plus reference levelized tariff of PKR 5.6988/kWh (equivalent to US Cents 3.6683/kWh) on February 21, 2020. The tariff is quaterly adjusted at PKR 11.1494 for the months of April to June 2025. The tariff, determined by a Build-Own-Operate (BOO) model, is indexed to the Pakistan Rupee-US Dollar exchange rate and adjusted for ination using Pakistan Consumer Price Indices (CPIs). The scalable components of the tariff include principal and interest repayments, return on equity (ROE), insurance and operation and maintenance (O&M) costs.

The Authority has approved a Return on Equity (ROE) and Return on Equity During Construction (ROEDC) for Meridian at a rate of 14%.

Scatec Sukkur B.V., a wholly owned subsidiary of Scatec Solar Netherlands B.V. (based in the Netherlands), is itself a wholly owned subsidiary of Scatec ASA (Scatec), a prominent Norwegian renewable energy company. Scatec Sukkur B.V. holds a 75% equity stake in Meridian, with the remaining 25% owned by Nizam Energy (Pvt.) Limited.

Scatec, established on February 2, 2007, is a publicly listed Norwegian company incorporated and headquartered in Norway, with its registered office located at Askekroken 11, NO-0277 Oslo, Norway. As a leading provider of renewable energy solutions, Scatec is dedicated to accelerating access to reliable and affordable clean energy in emerging markets. With a long-term commitment to sustainability, Scatec develops, builds, owns, and operates renewable energy plants. Currently, the Company has around 5 GW of renewable energy assets in operation and under construction across four continents. Driven by a shared vision of "Improving our Future," Scatec’s passionate employees and partners are committed to expanding the company's renewable energy capacity. Nizam Energy (Pvt.) Limited, established in 2012, specializes in providing EPC (Engineering, Procurement, and Construction) services, Power Purchase Agreements (PPAs), and the distribution of high-quality solar panels, inverters, and lithium battery storage solutions. In collaboration with Nizam Energy, Scatec Solar has developed and grid connected a 150 MWp solar power portfolio in Sukkur, Pakistan, which includes Meridian. This partnership is solidified by a formal agreement, strengthening the Company's stability and long-term prospects.

By capitalizing on its extensive experience and deep understanding of the energy sector, Scatec has built a strong portfolio across solar, wind, and hydropower projects, with a keen emphasis on long-term value creation. The company’s ability to secure and manage complex EPC contracts, alongside its expertise in navigating regulatory environments and securing financing, underpins its growth. Scatec’s partnerships with local and international players, such as its collaboration with Nizam Energy in Pakistan, further solidify its market presence and enable it to deliver impactful energy solutions. Through a combination of innovation, strategic partnerships, and a commitment to sustainability, Scatec continues to strengthen its position as a leader in the global renewable energy market.

Scatec benefits from a diversied income stream across multiple geographies and energy sectors. The Company’s ability to attract significant capital investment, secure financing for large-scale projects, and manage risk through structured contracts, such as PPAs, enhances its financial stability. Scatec's group revenue is approximately NOK 12,714 million, with an EBITDA in the range of NOK 3,845 million. Scatec’s healthy balance sheet, coupled with its operational efficiency, positions the Company to capitalize on new opportunities, ensuring continued growth and resilience in a competitive market. Meanwhile, Nizam Group's revenue as of June 2024 is approximately PKR 13,111 million.

The Board of Directors (BoD) of Meridian is composed of three executive members, including the CEO, representing the interests of the Company's sponsors.

Mr. Jawad Ali serves as a Nominee Director of Scatec Sukkur B.V. and holds the position of Finance and Asset Manager for Scatec ASA’s operations in Pakistan, where he oversees all financial and commercial matters. A Chartered Accountant by profession, he brings 19 years of experience with expertise in project finance, financial reporting, treasury operations, and stakeholder management, and has previously worked in the local power sector in a similar capacity. Mr. Raphael Aaron A. Letaba serves as a Nominee Director of Scatec Sukkur B.V. and holds the position of Vice President – Finance & Investments Asia at Scatec ASA. He graduated cum laude with a Bachelor of Science in Business Administration and Accountancy from the University of the Philippines Diliman and holds both the Chartered Financial Analyst (CFA) designation and Certified Public Accountant (CPA) qualification in the Philippines. In his role, he leads a multinational team of accounting, finance, and investment professionals responsible for Finance & Asset Management as well as Project Finance & Investment functions across Scatec’s Asian markets, including India, Laos, Malaysia, Pakistan, and the Philippines.

The board brings together a wealth of diverse expertise from various industries, ensuring a broad and comprehensive approach to governance. This diverse composition enables effective strategic decision-making, with a focus on leveraging the members' varied backgrounds to guide the company's growth and long-term success. Through their collective experience and leadership, the Board ensures that Meridian operates with strong oversight, sound judgment, and a commitment to delivering value to its stakeholders.

A.F. Ferguson & Co., Chartered Accountants, a member firm of PwC, serves as the external auditor for Meridian. The firm has issued an unqualified opinion on the Company's financial statements for CY24, confirming that the financial position is presented fairly and free from any material misstatements.

Meridian operates with a structured organizational framework that includes clearly defined reporting lines. Each department is led by experienced professionals who report directly to the CEO, ensuring efficient decision-making and accountability across the company. The CEO, in turn, reports to the BoD, strengthening the Company's governance and oversight mechanisms. This clear hierarchy supports effective management and reinforces a robust governance framework, promoting transparency and strategic alignment throughout the organization.

The CEO, Mr. Usman Ahmed is an Entrepreneur and belongs to a family of businessmen having an interest in diverse sectors. A graduate in Computer Information Systems and Business, Mr. Usman has over 10 years of experience working in his family businesses. Subsequently, he also serves as the CEO of Nizam Energy, looking after its operations and growth perspectives. Furthermore, he is also serving as a Non-Executive Director on the board of H. Nizam Din & Sons (Pvt) Limited. The remaining team members are qualied professionals with relevant experience looking after the day-to-day operations of the Company including invoicing, managing receivables and payables, debt repayments, and other matters.

The management of Meridian demonstrates effectiveness through its structured organization, experienced leadership, and clear reporting lines. The management is supported by the board, which oversees the plant’s overall performance and ensures optimal effectiveness through regular evaluations, provides guidance, and supports key decision-making for the smooth operations of the Company.

The Company maintains an adequate MIS that enables the management to effectively monitor operations and maintain seamless coordination with the O&M operator. Additionally, the presence of an in-house internal audit department ensures proactive identication and management of risks arising from operations, reinforcing the company’s commitment to transparency, efficiency, and operational resilience.

Meridian has entered into an Energy Purchase Agreement (EPA) with the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G), the designated Power Purchaser, for a term of 25 years, commencing from the Commercial Operations Date (COD) on January 19, 2024. Under the terms of the EPA, Meridian is entitled to receive energy payments against the delivered energy during the period.

The operations and maintenance of Meridian are managed by Scatec, which follows an integrated business model across the entire lifecycle of renewable energy projects. This model encompasses project development, financing, construction, ownership, and ongoing operation and maintenance. Scatec’s approach ensures seamless execution and long-term sustainability by maintaining a strong focus on every phase of the renewable energy plant’s development and operation. With its extensive expertise and global experience, Scatec is committed to delivering high-quality, reliable, and efficient energy solutions, driving the success of Meridian throughout its operational life.

The resource risk for Independent Power Producers (IPPs) under Pakistan's Renewable Energy Policy 2006 for solar energy primarily stems from the variability in sunlight availability, directly impacting energy generation. Under this policy, the IPP bears the resource risk, meaning that if solar output is lower than expected due to insufcient sunlight, it will affect the revenue of the solar plant. The policy encourages IPPs to mitigate this risk through efcient project design, such as the use of solar tracking systems and energy storage solutions. However, any reduction in generation due to low solar radiation directly influences the IPP's revenue, as the risk of resource availability is not transferred to the Power Purchaser or the government. For Meridian, the trend in solar generation will evolve as the plant continues its operations.

Meridian has adequate insurance coverage for business interruptions, property damages, etc., as per the agreements.

In FY25, Pakistan’s power generation stabilized at around 127,159 GWh, ending a two-year decline as improved hydel and solar output offset earlier contraction driven by high tariffs, inflation and weak economic activity. Installed capacity rose modestly to approximately 46,605 MW, though dependable capacity fell due to aging thermal infrastructure. The energy mix continued shifting away from fossil fuels, with solar emerging as the leading electricity source in early 2025, contributing to a record 25% share for renewables, while hydel and nuclear provided 30.4% and 19.1% respectively. Thermal power’s share in actual generation dropped below 50%, reflecting a policy push toward cleaner, indigenous sources. Nearly 2.8 GW of solar capacity was added through utility-scale and net-metering growth, bringing total distributed solar to 4.9 GW by March 2025. Despite these gains, rapid solar adoption has stressed the national grid, prompting regulatory adjustments and proposed reforms to net-metering tariffs. Looking ahead, power demand is expected to rise in FY26 as economic activity recovers and captive industrial units reconnect to the grid, reinforcing the need for continued investment in grid modernization and clean energy infrastructure.

Meridian began its commercial operations on January 19, 2024. During CY25, the plant successfully generated and supplied 98.75 GWh of energy to the national grid.

As per the EPA, the Company is required to maintain the plant's efficiency and availability factors to prevent the power purchaser from charging liquidated damages to the Company. Hence, during the period, the plant maintained its required benchmarks.

The total project cost, including cost overruns, amounted to USD 38.124 million, with the EPC cost contributing a major component of the total, amounting to USD 29.417 million. The sponsors contributed an initial equity of USD 6.332 million (16.61%), out of which Scatec contributed USD 4,749 million (75%) and Nizam contributed USD 1,583 million (25%). The total cost overruns, including the funding shortfall, amounted to USD 10.419 million. The remaining portion of the total project cost, amounting to USD 21.373 million, is funded through a mix of local (40%) and foreign debt (60%). The foreign debt is availed from FMO while the local debt is procured from a consortium of local banks.

The Company's trade receivables, mainly representing outstanding payments from CPPA-G against energy supplied, declined significantly to ~PKR 279 million as of 9MCY25 from ~PKR 621 million in CY24, reflecting improved cash collections during the period. Consequently, Gross Working Capital days improved to ~137 days as of 9MCY25 compared to ~105 days in CY24. indicating a relatively high reliance on working capital funding. However, the Company's liquidity profile remains sensitive to the timeliness of payments from CPPA-G, given the prevailing circular debt dynamics in the power sector.

The Company has been managing its working capital requirements primarily through internal cash generation, supported by improved receivables realization and a relatively lean operating cost structure. This has reduced reliance on external working capital borrowings and strengthened the Company's Liquidity position. However, the ability to sustain intemally funded operations remains contingent upon timely cash inflows from CPPA-G, with any deterioration in collections potentially increasing short-term financing needs.

The Company's cash flows are primarily derived from the sale of electricity to the power purchaser at an agreed tariff. As of 9MCY25, the Company generated adequate funds from core operations (FCFOs) of ~PKR 683 million, compared to ~PKR 884 million in CY24. Lower finance costs, driven by the decline in interest rates during the period, supported debt servicing capacity, with interest coverage (EBITDA to finance cost) steady at ~0.9x as of 9MCY25.

As of end 9MCY25, the Company's leverage increased to ~105% from ~101.8% in CY24, reflecting continued balance sheet pressure. Lenders have restricted servicing of the subordinated parent loan, amounting to ~PKR 2.5 billion as of September 2025, to prevent cash outflows until the tariff true up is finalized. Meanwhile, the Interest bearing portion, which constitutes the maJority of the loan, continues to accrue flnance costs. continued accumulation of losses has eroded the equity base, resulting in a negative equity position of ~PKR 400 million. Going forward, the Company's leverage and capital structure metrics are expected to remain constrained, with any meaningful improvement dependent on sustained cash flow generation from electricity sales to the power purchaser, timely realization of receivables, and disciplined servicing of outstanding debt obligations.