Liberty Wind Power 2 Limited (“LWP2” or “the Company”) is a 50MW renewable energy independent power producer located at Jhimpir, District Thatta, Sindh. The plant achieved Commercial Operations Date (COD) on 27 May 2022 and supplies electricity to the national grid under a long-term contracted offtake arrangement.

The Company operates under a NEPRA-approved cost-plus tariff framework with a 25-year Energy Purchase Agreement with Central Power Purchasing Agency (Guarantee) Limited (CPPA-G). The tariff remains indexed for O&M, exchange rate, and debt servicing components, while insurance costs are treated on a pass-through basis. As per the approved true-up determination, the levelized tariff stands at PKR 8.2171/kWh (US Cents 4.4853/kWh).

The project carries an approved Return on Equity (ROE) of 14%, payable monthly over the project life, as determined by the regulator. Returns are supported by contracted dispatch and indexed tariff components, with performance primarily subject to operational availability and wind resource variability.

Liberty Wind Power 2 Limited (“LWP2”) remains a wholly sponsor-owned independent power producer, with Liberty Mills Limited holding 99.9% shareholding, ensuring full strategic and financial alignment with the Liberty Group. The concentrated ownership structure supports clear decision-making, timely capital support, and coordinated oversight, typical of sponsor-backed IPP platforms.

Revenue stability is underpinned by the Energy Purchase Agreement (EPA) with CPPA-G for a 25-year tenure commencing from 2022, providing contracted offtake and tariff-based payments. The agreement incorporates protective mechanisms for non-project missed volumes, materially mitigating demand and counterparty risks. The long-term contracted structure, combined with sponsor continuity, supports predictable cash flows and operational visibility over the asset life.

The sponsor group has demonstrated consistent execution capability across industrial and infrastructure ventures and has maintained disciplined financial management within its power portfolio. Oversight remains focused on plant availability, cost control, and covenant compliance, reflecting an operationally conservative approach appropriate for regulated, long-tenor assets.

The sponsor’s diversified industrial base and established operating track record provide the Company with financial flexibility and implicit support capacity. The ability to meet obligations without reliance on short-term external funding and the absence of structural stress indicators support overall credit resilience during cyclical or operational volatility.

The Board comprises sponsor nominees, including senior executives of Liberty Group, enabling direct alignment between ownership, management, and strategic direction. Representation from finance and operational leadership facilitates informed oversight of both technical and financial performance.

Board members and senior representatives possess substantial experience across energy infrastructure, project finance, treasury management, and industrial operations. This depth of experience supports effective risk monitoring, regulatory coordination, and disciplined capital allocation under the long-term contracted framework.

Board reviews are conducted regularly, focusing on generation trends, receivable collections, working capital discipline, and compliance with debt servicing schedules. The structured review mechanism supports timely corrective actions and enhances operational predictability.

The Company’s FY2025 financial statements are audited by Yousuf Adil Chartered Accountants, who have issued an unqualified opinion, reinforcing the reliability and transparency of reported financial information.

LWP2 operates through a streamlined structure with clear reporting lines, with executive management reporting directly to the Board. Core functions include finance, compliance, and contract administration, while technical operations are executed through specialized contractors.

A lean, sponsor-led management team oversees treasury control, regulatory compliance, receivable management, and contractual performance. Focus remains on maintaining liquidity discipline and ensuring uninterrupted debt servicing, which has remained timely since commercial operations.

Management effectiveness is reflected in sustained plant operations, stable profitability, and orderly deleveraging. During FY2025, the Company maintained operating profit of PKR 970 million and net profit of PKR 260 million, while continuing scheduled debt repayments, demonstrating stable operational execution despite generation variability.

Operations and maintenance are outsourced to Siemens Gamesa Renewable Energy (Private) Limited and Orient Energy Systems (Private) Limited, while management retains oversight of financial, compliance, and strategic functions. This segregation supports technical reliability and strengthens internal control and risk monitoring

The Company operates under a 25-year EPA with CPPA-G, providing contracted energy payments and tariff-based revenue certainly. Under the agreement, the purchaser compensates for non-project missed volumes, materially limiting demand risk, while the Company remains responsible for plant availability and delivery performance.

Long-term O&M services are provided by Siemens Gamesa Renewable Energy (Private) Limited and Orient Energy Systems (Private) Limited under extended service arrangements. The contracted model supports sustained plant availability, technical reliability, and controlled lifecycle maintenance risk.

Wind resource variability remains the primary operational risk inherent to the sector. Generation during FY2025 moderated relative to the prior year, impacting dispatch levels; however, the contracted tariff structure partially mitigates revenue volatility.

The Company maintains comprehensive coverage for material damage, machinery breakdown, third-party liability, and business interruption, in line with lender and regulatory requirements. Insurance cost is recoverable through the tariff framework, with NEPRA allowing an annual charge of 0.4% of approved EPC cost, limiting financial exposure to unforeseen operational disruptions.

Wind energy remains a small but gradually expanding component of Pakistan’s overall generation mix, supported by policy preference for renewables and long-term contracted offtake arrangements with CPPA-G. While the regulatory framework and fixed tariff structure provide revenue visibility, operational performance inherently remains sensitive to wind resource variability, which directly influences dispatch and energy revenues.

The plant has been operational since COD on 27 May 2022. During FY2025, generation moderated relative to the prior year, reflecting lower wind contribution and dispatch levels. Energy sales declined to PKR 1,948 million (FY24: PKR 2,511 million), translating into softer operating profitability. Despite reduced output, the contracted tariff structure continues to partially cushion revenue volatility and supports baseline cash flows.

Under the approved tariff framework, the benchmark net annual plant capacity factor is 38%, with required plant availability of 97%. During FY2025, the Company reported an actual capacity utilization factor of ~29%, compared to higher levels last year, remaining below the benchmark level. Variations in capacity utilization reflect wind resource conditions, which remain outside management control, while operational availability continues to be maintained under contracted O&M arrangements.

Total project cost is ~USD 62.13 mln, funded through ~80% debt and ~20% equity. Debt comprises foreign financing priced at 3M LIBOR + 4.25% and SBP-refinanced local facility; the foreign loan carries a maturity of 13 years while the local loan carries maturity of 10 years, both repayable in quarterly installments.

As of FY25, the Company’s liquidity remains supported by a strong current asset buffer relative to current liabilities and the absence of sustained short-term borrowing dependence. Trade receivables remain material due to sector payment cycles; receivable days stand at 186 days (FY25) (FY24: 164 days), while current ratio improved to 4.2x (FY25) (FY24: 1.3x), reflecting strengthened short-term coverage.

Working capital requirements remain structurally limited, consistent with the renewable IPP model where fuel procurement and inventory cycles are absent. Liquidity is primarily supported through contractual capacity and energy receipts under the EPA, resulting in minimal reliance on short-term borrowings. As of FY2025, the Company reported current assets of PKR 1,134 million against current liabilities of PKR 273 million, translating into a strong current ratio of 4.2x, while short-term borrowings constitute only 1.6% of total debt. Trade receivables stood at PKR 1,041 million, aligned with billing cycles, and internal cash generation continues to adequately fund operational and debt servicing needs without external working capital dependence

Operating cash generation moderated during FY25. Net sales stood at PKR 1,948mln (FY25) versus PKR 2,511mln (FY24), while net profit after tax was PKR 260mln (FY25) versus PKR 585mln (FY24). Coverage metrics remain adequate with EBITDA/Finance Cost at 2.1x (FY25) (FY24: 2.2x), indicating continued ability to service financing costs despite softer topline.

Total borrowings reduced to PKR 8,843mln (FY25) from PKR 9,411mln (FY24), reflecting scheduled amortization. Shareholders’ equity strengthened to PKR 3,346mln (FY25) from PKR 3,086mln (FY24). Capital structure remains leveraged but improving, with Total Borrowings / (Total Borrowings + Equity) at 73.0% (FY25) (FY24: 75.7%), while short-term borrowings remain at 1.6% of total borrowings.