Muhammad Mubashir Nazir
PACRA Maintains Entity Ratings of Jhimpir Power (Pvt.) Limited
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). 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 2,449mln for CY22 (CY21: ~PKR 1,901mln). During CY22, the plant delivered total energy of 138.7GWh (CY21: 159.9GWh) to the national grid. The change in output delivered is subject to wind speed patterns in the region. JPL is successfully making repayments against its project debt (USD 93.5mln) that is entirely obtained from US International Development Finance Corporation (DFC). The company has successfully repaid approximately 41.05% 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 patterns from power purchaser, debt repayment behavior, and liquidity cushion would impact the directions of ratings. Going forward, timely repayment of a significant portion of project debt along with meeting operational benchmarks will contribute towards driving the ratings upwards.
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.