PACRA Assigns Initial Entity Ratings to Reon Energy Limited.

The ratings reflect Reon Energy Limited’s (“Reon” or “the Company”) established presence in providing smart and green energy solutions. The Company is a wholly owned subsidiary of RMH International DMCC, a private company based in the UAE that specializes in high and very high voltage dry-insulated technologies for power utilities. RMH is owned by the Company's leadership team, which has depicted strong cohesiveness. Reon is leading the transition to sustainable power by deploying intelligent renewable microgrids across large-scale industries such as cement and textile. These sectors, known for their high energy demands and carbon-intensive operations, benefit significantly from Reon’s advanced microgrid solutions, which integrate wind power, solar power, and real-time analytics. The Company has completed multiple projects and has several others in progress, including collaborations with some of the largest and most well-known groups, such as Lucky, Nishat, and Gul Ahmed. Reon operates primarily under (EPC) model. To date, Reon has successfully installed over 500 MW of solar capacity across Pakistan, implemented 7,500 EPC sites for telecom towers, and deployed 90 MWh of battery energy storage systems. The Company offers three main products: REFLEX<span style="font-family: Arial, Helvetica, sans-serif;">™</span>, SPARK<span style="font-family: Arial, Helvetica, sans-serif;">™</span>, and Asset Performance Management. REFLEX<span style="font-family: Arial, Helvetica, sans-serif;">™</span> is Reon’s advanced lithium-ion (LFP) battery platform that provides a cost-effective alternative to lead-acid batteries. It supports a range of applications, including self-consumption, peak shaving, and energy arbitrage, ensuring uninterrupted power supply and optimized energy distribution. SPARK<span style="font-family: Arial, Helvetica, sans-serif;">™</span> is a hardware-agnostic Energy Management Platform focused on enhancing energy efficiency and operational excellence through real-time data analytics. Through Smart Asset Management, Reon enables industrial facilities to maximize wind power and solar PV efficiency by integrating plant data into a unified database, optimizing energy production, generation costs, system performance, and lifecycle management of solar assets. Reon’s revenue is primarily driven by the Commercial &amp; Industrial, and Telecom sectors. In CY24, the Company’s revenue increased by 29%, driven by growing market demand. Higher gross margins and profitability were also recorded during the year. The Company’s equity base has strengthened, reaching PKR 1,172 million. Currently, the working capital is managed by internal cash generation, and Reon has minimal reliance on short-term borrowings, decent financial profile. Supported by stable contractual cash flows, the Company plans to raise funds through Commercial Paper (CP), reflecting its proactive approach to diversifying funding sources. The sponsor’s strong understanding and expertise in investment management are also viewed positively.</p>
The ratings depend on the management's ability to sustain a low risk profile. The management's ability to build profitable volumes remains significant for the ratings. Any significant decrease in margins and/or coverages will impact the ratings.

About the Entity
Reon Energy Limited, was incorporated on September 15, 2014 as a public unlisted company to carry out the business of trading and construction of renewable energy projects, mainly solar, to commercial and industrial consumers. On March 2023, the BOD of DLL approved a share purchase agreement with 'Juniper International FZ-LLC' for the sale of DLL’s entire shareholding in the Company. The sale was ratified by the members of DLL in May 2023. After the satisfaction of the corporate guarantee issued by DLL condition was satisfied, allowing the DLL to issue NOC to RMH International DMCC. Effective from October 8, 2024, the company became a wholly owned subsidiary of RMH International DMCC. The CEO-Mujtaba Haider Khan, is assisted by a team of qualified individuals with significant experience in the energy business.