PACRA Maintains the Entity Ratings of Master Green Energy Limited

The assigned ratings of Master Green Energy Limited (“MGEL” or “the company”) reflects its association with Master Group, a pioneer in foam products in Pakistan, which has successfully diversified into the renewable energy sector, first through Master Wind Energy Limited in Jhimpir, Sindh, and subsequently through the installation of this 50MW wind power project in District Jamshoro, Sindh. The Group's established track record and financial backing provide an important layer of comfort to the overall credit profile of MGEL. The project commenced construction in September 2019 and achieved its Commercial Operations Date (COD) in August 2021. During the period, following the Government of Pakistan's broader initiative to renegotiate and amend Power Purchase Agreements across the IPP sector, MGEL successfully executed an amendment to its PPA, which has strengthened the Company's operational and financial framework going forward. MGEL operates under a 25-year Energy Purchase Agreement (EPA) with Central Power Purchasing Agency Guarantee Limited (CPPA-G), under which the power purchaser is obligated to pay for any non-project missed volumes at the applicable tariff rate, with energy payments secured through CPPA-G and backed by the sovereign guarantee of the Government of Pakistan. The project's revenues and cash flows are primarily exposed to wind risk and operational risk. While wind variability is borne by the Company — introducing seasonality in cash flows — operational risks are mitigated through adherence to performance benchmarks for availability and efficiency as outlined in the EPA. The EPC contract was awarded to Hydro China International Engineering Company Limited and Hangzhou Huachen Electric Power Control Company, while the Company has secured long-term Operations and Maintenance (O&M) agreements with Siemens Gamesa Renewable Energy Pvt. Limited and Albario Engineering Pvt. Limited, whose international and local experience provides added operational reliability. During 1HFY26, MGEL delivered 69.57 GWh of electricity to the national grid, reflecting a notable improvement compared to 52.12 GWh in 1HFY25, primarily driven by improved wind conditions with average wind speeds rising to 6.62 m/s from 6.01 m/s in the corresponding period last year. This recovery translated into a strong rebound in profitability, with the Company posting a net income of PKR 277 million in 1HFY26 compared to a loss reported in FY25, while Free Cash Flow from Operations (FCFO) improved to approximately PKR 863 million and the interest coverage ratio strengthened to 2.68x. To support working capital requirements, the Company has access to short-term borrowing facilities, with utilization of PKR 270 million against the PKR 300 million limit during 1HFY26. As of December 2025, MGEL has repaid nineteen quarterly installments of its project-related long-term debt in a timely manner, without any forbearance period. Although leverage remains sizable at 69.3% (FY25: 72.3%), it continues to decline steadily in line with the project's life cycle, with further comfort drawn from the standby letter of credit (SBLC) equal to two quarterly installments maintained for the entire loan term as per financing agreements.
The Company's performance remains inherently linked to wind availability, and any sustained decline in wind speeds affecting debt servicing capacity will continue to be a critical consideration; however, historical performance patterns, along with the expectation of sponsor support if required, remain important factors underpinning the current rating

About the Entity
MGEL is part of the Master Group, a diversified industrial conglomerate with over 50 years of history, originating with Master Enterprises (Pvt.) Ltd in 1963 pioneers in Pakistan's foam industry. The Group has since expanded into textiles, engineering, automobiles, and retail. MGEL's project cost totaled USD 65.03mln, financed 80% through debt (USD 52mln) from local and international institutions. The Company is led by CEO Mr. Shahzad Malik, overseeing the Group's energy ventures, and COO Mr. Rumman Arshad Dar, who brings 23+ years of experience in energy and transaction advisory.