PACRA has upgraded Short Term Entity Rating of Liberty Wind Power 2 Limited

The assigned ratings reflect the Company’s predictable cash flow profile under a regulated cost-plus tariff structure that ensures recovery of approved costs along with defined margins. The tariff incorporates indexation for O&M, exchange rate movements, and debt servicing components, while insurance expenses are treated on a pass-through basis, collectively reducing exposure to inflationary, currency, and counterparty risks and providing stability to long-term earnings.
During FY2025, generation moderated owing to wind variability, resulting in revenues declining to PKR 1.95 billion from PKR 2.51 billion last year. Despite lower dispatch, cash flows remained sufficient to support obligations, with operating profit of PKR 970 million, net profit of PKR 260 million, and EBITDA-to-finance cost coverage of 2.1x, indicating adequate debt servicing capacity. Liquidity remaind sound and working capital requirements primarily managed through internal cash generation and minimal reliance on external borrowings, while available credit lines provide additional cushion for future needs, if required. Continued scheduled amortization reduced borrowings to PKR 8.84 billion (FY24: PKR 9.41 billion), alongside a strengthening of equity to PKR 3.35 billion, supporting gradual deleveraging and an improving capital structure. Additional comfort is drawn from the notified tariff true-up determination, which enhances visibility over approved project costs and strengthens recovery through indexation mechanisms, thereby reducing regulatory uncertainty. Overall, stable contracted revenues, disciplined financial management, and adherence to scheduled debt repayments underpin the assigned ratings.
Going forward, the ratings derive support from the Company’s contracted revenue structure, predictable cash flow profile, and defined debt repayment schedule under the project financing framework. The ratings will remain supported by continued operational performance, adherence to financial discipline, and stability of the regulatory environment governing tariff recovery mechanisms.

About the Entity
Liberty Wind Power 2 Limited (“LWP2” or “the Company”) is an independent power producer incorporated to develop, own, and operate a 50MW wind power plant located at Jhimpir, District Thatta, Sindh. The project achieved Commercial Operations Date (COD) on 27 May 2022 and supplies electricity to the national grid under a 25-year Energy Purchase Agreement with Central Power Purchasing Agency (Guarantee) Limited (CPPA-G). The Company operates under a NEPRA-approved cost-plus tariff framework, providing contracted offtake and predictable revenue streams.