PACRA Maintains Entity Ratings of Hawa Energy Private 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). The plant achieved its commercial operations date (COD) in March 2018. Under the signed PPA with CPPAG, the plant will provide electricity to the national grid for a period of 20 years from the COD. The Government of Pakistan has provided a sovereign guarantee against dues from CPPA-G. The project revenues and cash flows are exposed to wind risk and operational risk. The operational risk aspect is mitigated by achieving benchmarks of availability and efficiency as agreed in the Energy Purchase Agreement (EPA). The working capital requirements are fulfilled through in-house adequate cash flow generation. Net cash from operating activities of the Company stood at ~PKR 3,833mln for CY22 (CY21: ~PKR 2,034mln). During CY22, the plant delivered total energy of 140.4GWh (CY21: 160.9GWh) to the national grid. The change in output delivered is subject to wind speed pattern in the region. HEPL is successfully making repayments against its project debt (USD 95.3mln) that is entirely obtained from US International Development Finance Corporation (DFC). The company has successfully repaid approximately 40.55% of its long-term project debt which adds positively to the financial risk profile.
Upholding operational performance in line with agreed performance levels is important. Receipt pattern from power purchaser, debt repayment behavior and liquidity cushion would impact the directions of ratings. Going forward, timely repayment of significant portion of project debt along with meeting operational benchmarks will contribute towards driving the ratings upwards.
HEPL is a wholly owned subsidiary of Hawa Holdings Limited, a company incorporated in British Virgin Islands. The sponsors of the company are JCM Power (51%), DL Energy and Asma Capital (35%) and Mr. Bruno C. Bucari (14%). Both DL Energy and JCM Power have a proven history of implementing power projects globally with a focus on renewable sector. The total cost of the project was USD 127.1mln which was financed with a debt-to-equity ratio of 75:25. HEPL board comprises of seven 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.