Jhimpir Power (Pvt.) Limited

CREDIT RATING REPORT | Apr-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
04-Apr-25 A+ A1 Stable Maintain -
05-Apr-24 A+ A1 Stable Upgrade -
27-Apr-23 A A1 Stable Maintain -
27-Apr-22 A A1 Stable Initial -
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.

Rating Rationale

Jhimpir Power Private Limited (JPL) 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 revenues and cash flows are exposed to two main 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, JPL generated 121.5 GWh of electricity (CY23: 163 GWh), including 28.4 GWh of NPMV (CY23: 45GWh). The decline was primarily driven by lower wind speeds and curtailment from the power purchaser. Consequently, revenues fell to PKR 4,800mln (CY23: PKR 6,385mln), marking a 25% year-over-year (YoY) decrease, in line with the 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 3,448mln for CY24 (CY23: PKR 5,047mln), while outstanding receivables stood at PKR 2,083mln (CY23: PKR 3,614mln). 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. JPL continues to meet its repayment obligations 1on its project debt of USD 95.7mln, 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.

Key Rating Drivers

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.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Jhimpir Power (Pvt.) Limited

rating analysis

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Profile
Plant

Jhimpir Pvt Ltd (JPL) is a 49.735 MW wind power plant, located in Jhimpir, District Thatta, Sindh. The project was conceived in 2012 and achieved its Commercial Operations Date (COD) in March 2018.


Tariff

JPL has a generation tariff (levelized tariff for years 1-10) of US 12.4288 cents/Kilowatt hour (KWh). Then a tariff of PKR 5.7605/Kwh for remaining 10 years (11-20 years.). Currently National Electric Power Regulatory Authority (NEPRA), the company is allowed to charge a tariff of PKR 36.0453/kWh for the quarter Jan- March 2025 subject to applicable indexations and adjustments as per NEPRA Tariff determination.


Return on Project

The Return on Equity (ROE) of the project with NEPRA is 17%.


Ownership
Ownership Structure

Jhimpir Power Pvt Ltd (JPL) was incorporated in Pakistan as a Pvt Ltd Co. on April 18, 2007 under the repealed Companies Ordinance 1984, Now the Companies Act 2017. The Company is a wholly owned of JPL Holding (Pte) Ltd. The ultimate parent of the Company is the JPL Holding PTE Ltd, Singapore.


Stability

Stability in the JPL is drawn from the agreements signed between the company and power purchaser. However, sponsors association with JCM Power will continue to provide comfort.


Business Acumen

JCM is a fully-integrated renewable energy Independent Power Producer developing and operating clean energy projects in South & Southeast Asia and sub-Saharan Africa. In addition to the JPL wind farm, JCM is also exploring the development of other power projects in Pakistan as part of its Asian platform.


Financial Strength

The financial strength of the sponsors is considered strong with their global presence.


Governance
Board Structure

JPL Board of Directors (BOD) comprises five members – Mr. Muhammad Ali, Mr. Saad-Uz-Zaman, Mr. Jonathan Richard Bahen, Mr. Milinda Shamal Wasalathanthri and Mr. Shane Malcolm Eglinton. Furthermore, the board has formed 3 sub committees including Audit, Operations and HR to engage and oversee the management decisions.


Members’ Profile

The board consists of members from different backgrounds including Engineering, Finance and Investments, Banking, Law and Business Management. The Chairman, Mr. Muhammed Ali an Engineer, has over a decade of experience in the Energy Sector with exposure to key developments in the renewable energy industry. Similarly, remaining members bring vast experience and prerequisite qualifications to be on the board.


Board Effectiveness

Regular meeting are conducted by the board, where matters relating to the plant and company's operations are discussed in the presence of all board members. Proper minutes of the board meetings are maintained covering the detailed discussion during the meetings.


Financial Transparency

A. F. Ferguson (PWC) Chartered Accountants, the external auditors of the company have expressed an unqualified opinion for the year ended 31 Dec 2023. Audit of CY 2024 is in process.





Management
Organizational Structure

JPL has an integrated organizational structure that is segregated into 2 broad departments: (i) Finance, (ii) Site Operations. The finance division is responsible for billing, taxation, treasury, invoices, compliance, financial planning and analysis, audit and reporting. On the other side, the operations division is headed by General Manager Operations who oversees matters relating to the plant site.


Management Team

Mr. Muhammad Ali, the CEO, has over 12 years of experience in business. He has been with the Company for more than 7 years. Mr. Abdul Basit Tola is appointed as CFO. He is a member of the ACCA, UK and has more than 24 years diversified experience in corporate & management reporting, banking & finance, MIS Implementation. Ms. Saira Soomro Najmi is the Head of legal and Company Secretary.


Effectiveness

The CEO involved in day-to-day operations and spearheads the senior management of the Company at all levels. Daily/Weekly/ monthly meetings are conducted between the CEO and relative Head of Departments. The agenda of the meeting includes strategic matters and matters related to ongoing projects (financial & operations).


Control Environment

The Company maintains an adequate GE SCADA reporting system for the management to keep track of all operating activities and operational efficiencies. The system generates daily and monthly reports containing information on the generation and efficiency of the plant. The company has well-organized finance division while the O&M of the plant is outsourced


Operational Risk
Power Purchase Agreement

JPL operates under the Renewable Energy Policy 2006. Energy Purchase Agreement is with CPPA-G, and has tenure of 20 years starting from the COD.


Operation and Maintenance

The Company has signed an agreement with General Electric International Inc (G.E) for the Operation and Maintenance Services in relation to their Wind Power Plant valid till March 2028. General Electric has a significant presence globally, and possesses requisite experience to carry out O&M activities effectively.


Resource Risk

Wind risk is defined under the renewable energy policy 2006 is the risk of variability of wind speed, and therefore of the effective energy output of the wind IPP. This risk shall be absorbed by the power purchaser. As per the EPA, JPL shall be responsible for the delivery of energy.


Insurance Cover

The company has adequate insurance coverage for material damage, third party liability, terrorism and business interruptions affecting the profits. O&M contractors will be liable to pay Liquidated Damages (LDs) as per the contract if benchmark availability is not achieved.


Performance Risk
Industry Dynamics

 The country’s total installed power generation capacity was recorded at ~45,888MW in FY24, up ~0.3% YoY (FY23: ~45,738MW), while the actual power generation was recorded at ~15,662MW, down ~0.6% YoY. This capacity is distributed among various energy sources, with hydel accounting for 23%, thermal 56%, nuclear 8%, renewale 6%, this makes up 93% produced through CPPA-G and 7 percent through KE. In order to balance the energy mix and to reduce dependence on imported energy, Govt. emphasize the transition towards utilizing renewable energy sources and indigenous fuels. As of FY24, thirty-six (~36) wind power projects of ~1,790MW cumulative capacity have achieved Commercial Operation and are supplying electricity to the National Grid


Generation

During CY24 the plant generated Net Electrical Output of 93.1 GWh (CY23: 118 GWh). The total energy delivered by the plant is dependent on the electricity demand from the power purchaser and availability of desired wind speed.


Performance Benchmark

The plants availability and efficiency during the year has required benchmarks of 95% and 35% as per EPA. JPL successfully maintained the availability benchmark. However, efficiency remained low due to reduced wind speeds, leading to lower revenue.


Financial Risk
Financing Structure Analysis

Debt financing constitutes 75% of the project cost i.e., USD 127.1mln. The company has obtained 100% Foreign Debt Financing from Overseas Private Investment Corporation amounting to USD 95.3mln priced at 3MLIBOR plus 3.70% per annum with the maturity of 10 years with semiannual repayments. Further, the equity portion of the project cost amounts to USD 31.8mln, which is majorly injected through the sponsoring companies.


Liquidity Profile

Circular debt continues to be an issue for companies operating in power sector. Though Wind IPPs don’t need to procure raw material therefore they rely on internal cash flows. JPL's liquidity profile remains strong, with ample cash available on its balance sheet.


Working Capital Financing

Renewable IPPs do not have to pay for fuel which minimizes its working capital needs. JPL's Net Working Capital Days stood at 205 days for CY24 (CY23: 179 days) which is a function of its receivables days. Receivables from CPPAG stood at PKR 2,083 mln for CY24 (CY23: PKR 3,614 mln).


Cash Flow Analysis

Free cash flow from operations for CY24 stood at ~PKR 3,448mln (CY23: PKR 5,047 mln). Interest coverage ratio (EBITDA/Finance Cost) as at CY24 clocked at 3.0x (CY23:3.6x)


Capitalization

JPL's leveraging at end Dec 24 stood at 49.1% (CY23: 56.2%). The company has been paying its principal and interest instalments as per their agreement with the financing authority. As of March2024, the Company has successfully repaid ~56% of its project debt. JPL has no loans on its balance sheet other than the project-related loan.
 
 

Apr-25

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Jhimpir Power (Pvt.) Limited

financial summary

(PKR mln)

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Dec-24
12M		 Dec-23
12M		 Dec-22
12M
A. BALANCE SHEET
1. Non-Current Assets 16,906 18,368 16,345
2. Investments 0 0 0
3. Related Party Exposure 0 0 22
4. Current Assets 6,745 7,946 6,085
a. Inventories 0 0 0
b. Trade Receivables 2,083 3,614 2,802
5. Total Assets 23,651 26,314 22,452
6. Current Liabilities 555 1,178 390
a. Trade Payables 210 106 36
7. Borrowings 11,341 14,118 13,338
8. Related Party Exposure 0 0 0
9. Non-Current Liabilities 12 12 8
10. Net Assets 11,743 11,007 8,717
11. Shareholders' Equity 11,743 11,007 8,717
B. INCOME STATEMENT
1. Sales 4,800 6,385 3,815
a. Cost of Good Sold (2,346) (2,290) (1,712)
2. Gross Profit 2,454 4,095 2,103
a. Operating Expenses (204) (170) (143)
3. Operating Profit 2,250 3,925 1,960
a. Non Operating Income or (Expense) 188 705 578
4. Profit or (Loss) before Interest and Tax 2,438 4,631 2,538
a. Total Finance Cost (1,255) (1,513) (862)
b. Taxation (72) (63) (21)
6. Net Income Or (Loss) 1,111 3,055 1,655
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 3,448 5,047 3,007
b. Net Cash from Operating Activities before Working Capital Changes 2,464 3,852 2,298
c. Changes in Working Capital 1,624 (538) 151
1. Net Cash provided by Operating Activities 4,088 3,314 2,449
2. Net Cash (Used in) or Available From Investing Activities (2) (30) 208
3. Net Cash (Used in) or Available From Financing Activities (3,702) (2,139) (1,945)
4. Net Cash generated or (Used) during the period 384 1,145 712
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) -24.8% 67.4% 12.3%
b. Gross Profit Margin 51.1% 64.1% 55.1%
c. Net Profit Margin 23.1% 47.8% 43.4%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) 105.7% 70.6% 82.8%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 9.0% 30.0% 20.1%
2. Working Capital Management
a. Gross Working Capital (Average Days) 217 183 281
b. Net Working Capital (Average Days) 205 179 276
c. Current Ratio (Current Assets / Current Liabilities) 12.2 6.7 15.6
3. Coverages
a. EBITDA / Finance Cost 3.0 3.6 3.7
b. FCFO / Finance Cost+CMLTB+Excess STB 0.9 1.2 1.1
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 5.0 3.9 6.0
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 49.1% 56.2% 60.5%
b. Interest or Markup Payable (Days) 37.5 44.1 66.0
c. Entity Average Borrowing Rate 9.2% 10.0% 6.2%

Apr-25

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Jhimpir Power (Pvt.) Limited

rating scale

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Apr-25

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Jhimpir Power (Pvt.) Limited

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
  2. Restrictions
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    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
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