PACRA Maintain Entity Ratings to Prism Energy (Pvt.) Limited

Prism Energy (Private) Limited (“PEPL”) formally started its solar renewable energy business in August 2020 in Pakistan. Prism Energy (Private) Limited is a subsidiary of InfraCo Asia, a Private Infrastructure Development Group company, headquarter in Singapore. PEPL's business model is further categorized into three categories, including (i) Power Purchase Agreement (PPA), (ii) Buyout model (BOOT), and (iii) Solar on cash (EPC mode). Under the PPA mode, the Company invests in solar equipment and sells solar-generated power to the customer on an agreed tariff under a long-term agreement. Whereas under the BOOT mode, PEPL enters into a sale of equipment agreement with the customer and receives monthly payments to cover the cost of the plant and the cost of operations and maintenance of the solar facility. Finally, customers can also engage PEPL for the installation of a plant at its site from its own cash under the EPC model. As of FY24, PEPL has successfully installed over 10 MW of solar capacity across twelve sites, including a paper mill (950 kW) and hospital (270 kW), both commissioned in 2024. Additionally, PEPL has signed a Power Purchase Agreement with a multilateral organization for the installation of a 185kW solar system at their Islamabad offices, which was also commissioned in October 2024, while it has also completed construction of a cold storage for a 160kW solar installation under the EPC mode. In FY24, PEPL witnessed a 28% increase in revenue, rising to PKR 81mln, and achieved a turnaround from a loss of PKR 77mln to a profit of PKR 25mln. Gross margins slightly declined to 79% (FY23: 83%) due to competitive pricing strategies for expanding its project base. The Company's equity base has strengthened, reaching PKR 1,261mln (FY23: PKR 726mln), primarily due to an additional PKR 500mln equity injection from the sponsors. The Company has no borrowings, which enhances its financial profile. The implementation of IFRS-16, which mandates the recording of all leased assets and related liabilities originating from lease transactions on the books, is also taken into consideration in assigning ratings. Nonetheless, this magnified position has no impact on the Company's projected financial health.
PEPL is self-sufficient and is meeting all of its operating expenses from its operating cash flows, and PEPL is also doing additional projects from its own cash flows. The Ratings draw comfort from the solid and consistent cash flows of PPEL. In addition, explicit support is being provided by the sponsors, ensuring that the Company will receive assistance in the event of any cash shortfalls or contingencies and providing adequate liquidity to meet its obligations in a timely manner. The ratings incorporate sponsors’ confidence about the soundness of investment strategy in Alternative and Renewable Energy (ARE), as it is completely aligned with the government’s policy to promote renewables in Pakistan. However, the ratings remain dependent on the management's ability to sustain a low-risk profile along with timely receipts from customers. At the same time, maintaining a strong financial profile and liquidity remains critical. Any significant decrease in margins and/or coverages will impact the ratings.

About the Entity
Prism Energy (Pvt.) Limited is a joint venture of InfraCo Pakistan (a subsidiary of InfraCo Asia) and Albario Engineering Private Ltd. (AEPL) and was incorporated in 2019. InfraCo Asia is funded by four sovereigns (the governments of the UK, Switzerland, Australia, and the Netherlands). AEPL is a one-window solution provider in the fields of energy, industrial solutions, and infrastructure. PEPL leverages its expertise in the solar sector to offer a range of turnkey solutions tailored to meet customer needs. PEPL Board includes five members. Mr. Arooj Asghar is the CEO of the Company, who is supported by a team of qualified professionals.