PACRA Maintains Entity Ratings of Hawa Energy (Pvt.) Limited

Hawa Energy Private Limited (HEPL) is operating a 49.735MW wind power plant, located in Jhimpir, District Thatta, Sindh. The project is established under the Renewable Energy Policy 2006 by the Alternative Energy Development Board (AEDB), which offers a guaranteed internal rate of return, cost indexation, and pass-through tariff structure. The plant achieved its commercial operations date (COD) in March 2018. Under the signed Energy Purchase Agreement ("EPA") with CPPAG, the plant will provide electricity to the national grid for a period of 20 years from the COD. The project's revenues and cash flows are subject to two primary risks. First, wind risk—under the upfront tariff regime, any fluctuations in wind speeds are absorbed by the Company, potentially leading to seasonal variations in cash flows. Second, operational risk—the Company must ensure the complex maintains a 95% availability rate and remains ready to supply electricity to the national grid. This risk is mitigated by General Electric, the O&M operator, which brings extensive experience in both international and local markets. The Company has adequate insurance coverage. Further The Government of Pakistan has provided a sovereign guarantee against dues from CPPA-G.
During CY24, HEPL generated 124.5GWh of electricity (CY23: 167.4GWh), including 51.9GWhof NPMV (CY23: 52.2GWh). The decline was primarily driven by lower wind speeds and curtailment from the power purchaser. Consequently, revenues fell to PKR 4,794mln (CY23: PKR 6,281mln), marking a 24% year-over-year (YoY) decrease, in line with the 26% YoY drop in electricity generation. While electricity generation in CY24 remained below the benchmark level, it was still sufficient to comfortably service the Company’s debt repayments and operational expenses. However, a continuous downward trend in electricity generation has been observed, which, if sustained, could potentially impact the Company’s financial profile. Free cash flow from operations stood at PKR 3,520mln for CY24 (CY23: PKR 4,945mln), while outstanding receivables stood at PKR 2,223mln (CY23: PKR 3,727mln). The Company efficiently manages its working capital requirements through internal cash generation without relying on external debt financing. However, it has secured banking lines that can be utilized if needed. HEPL continues to meet its repayment obligations on its project debt of USD 95.3mln, which is fully financed by the US International Development Finance Corporation (DFC). Notably, the Company has successfully repaid approximately 55% of its long-term project debt, contributing positively to its financial risk profile.
Upholding operational performance in line with agreed levels, along with factors such as the receipt pattern from the power purchaser, debt repayment behavior, and liquidity cushion, remains critical to hold the ratings. Additionally, any changes in the regulatory environment could potentially impact the ratings, going forward.

About the Entity
JPL is a wholly owned subsidiary of JPH Holding PTE Ltd (Singapore). The ultimate sponsors of the company are JCM Power (94.93%), Burj Energy International Management Limited Dubai (5.07%). The total cost of the project was USD 125mln which was financed with a debt-to-equity ratio of 75:25. JPL board comprises five members from the sponsoring companies. The Chairman and CEO Mr. Muhammed Ali, an engineer by profession has over a decade of experience in the Energy Sector with exposure to key developments in the renewable energy industry. He is accompanied by a team of experienced individuals to assist him on day-to-day operations.