PACRA Maintains the Entity Ratings of Harappa Solar (Pvt.) Limited.

Harappa Solar Private Limited, an 18MWp Solar Power Plant – incorporated in September 2014, operates under the Renewable Energy Policy 2006. The rating takes into account smooth operational performance and relative positioning within the peer universe. Assigned ratings draw comfort from the sound profile of the sponsors, who possess considerable experience in developing greenfield projects in the power and industrial sectors, as well as operating a portfolio of solar projects. A long-term energy purchase agreement of 25 years with the Power Purchaser mitigates underlying business and economic risk factors, while sovereign guarantees on the Power Purchaser’s payment obligations further strengthen the Ratings. During 3QFY25, Harappa Solar generated 28,009MW, compared to 27,017MW in 3QFY24 (FY24: 30,397MW, FY23: 31,475MW, FY22: 31,216MW) of electrical output, with the required benchmark of 17%.Improved generation resulted in growth in net revenues (3QFY25: PKR 636mln, 3QFY24: PKR 618mln, FY24: PKR 926mln, FY23: PKR 840mln, FY22: PKR 602mln), which in turn led to higher gross and operating margins. The Company has availed both foreign and local loans to finance the project. 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%). The Company is required to maintain a Debt Servicing Reserve Account (DSRA) equivalent to two debt repayments, as stipulated under financing agreements; the DSRA is being funded through a Standby Letter of Credit (SBLC).
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%. With a favorable liquidity profile and adequate internal resources for working capital management, debt servicing has remained satisfactory. The Power Purchaser has been making payments on time so far; however, any delays in future payments may exert some liquidity pressure. Capitalization metrics improved in 3QFY25 due to an increase in the equity base and a reduction in borrowings. With periodic repayments, gearing and leverage levels are expected to remain low. Enhancing operational performance in line with agreed performance levels remains essential. Improvement in inflows and the availability of unutilized credit limits continues to support the Ratings.

About the Entity
Harappa Solar Private Limited, incorporated in September 2014, is a Renewable Energy Independent Power Producer (RE IPP) operating under the Renewable Energy Policy 2006, administered by the Alternative Energy Development Board (AEDB). The Company achieved financial close in February 2017 and commenced commercial operations in October 2017. The total project cost stands at USD 24.4 million, of which 75% (USD 18.3 million) was financed through debt, sourced from both local and foreign financial institutions in a 55:45 ratio. Harappa Solar operates an 18MWp solar power plant and forms part of a broader renewable energy portfolio backed by the same sponsors. Other associated projects include the 50MWp Gharo Solar Limited and the 8MWp Kathai-II Hydro Private Limited, reflecting the sponsors' active involvement in Pakistan’s renewable energy space. The majority shareholder of Harappa Solar is Mr. Rana Nasim Ahmed, who holds a 75% stake in the Company. Other key shareholders include Mr. Khaqan Babar Cheema (12%), a prominent logistics sector entrepreneur and sponsor of Orient Cargo, and Wind force (Pvt.) Ltd (12.8%), a reputed renewable energy power generation company based in Sri Lanka. The Company is governed by a Board of Directors (BoD) comprising eight members, ensuring strategic oversight and governance. Since inception, Harappa Solar has been led by Chief Executive Officer Mr. Rana Uzair Nasim. He is supported by a qualified and experienced management team, contributing to the Company’s steady operational performance and commitment to sustainable energy development in Pakistan.