PACRA Maintains the Entity Ratings of Harappa Solar (Pvt.) Limited.

The assigned ratings reflect the comparatively low-risk business profile of Harappa Solar Private Limited ("Harappa Solar" or "the Company"), a grid-connected renewable Independent Power Producer (IPP) operating under the Renewable Energy Policy 2006. The Company's business risk profile is supported by its long-term contractual framework, particularly the 25-year Energy Purchase Agreement (EPA) with the Power Purchaser, which materially mitigates offtake risk by ensuring the purchase of electricity generated throughout the contractual term. In addition, the sovereign guarantee covering the Power Purchaser's payment obligations significantly reduces counterparty risk. These contractual arrangements provide strong revenue visibility over the remaining operating life of the plant, largely insulating the Company from fluctuations in electricity demand, tariff changes, and payment risk. The ratings are further supported by the sponsor group's established track record in developing and operating renewable energy projects in Pakistan. The participation of Windforce (Pvt.) Ltd., a Sri Lanka-based renewable energy company, strengthens the Company's technical capabilities and operational governance. Pakistan's renewable energy sector continues to benefit from favourable solar and wind resources supported by a long-term policy framework aimed at increasing the share of renewable energy in the country's generation mix. Despite these favourable fundamentals, the sector remains exposed to structural challenges, including circular debt, evolving regulatory policies, transmission constraints, and changing electricity demand dynamics. As part of broader power sector reforms, the Government has undertaken initiatives to rationalize capacity payments, resulting in revised tariff arrangements for a number of IPPs. Harappa Solar continues to operate under its original tariff framework, with no changes to the contractual terms governing the project, owing to its existing financing and shareholding structure, comprising foreign lenders and an international strategic shareholder. During FY9M26 operational performance has remained above the contractual benchmark where the electricity generation stood at 27,438MWh (30,942MWh-FY25 and 30,397MWh-FY24). Revenue generation remained stable, with net revenues of PKR 599mln during 9MFY26 compared with PKR 929mln in FY25 and PKR 926mln in FY24, supporting healthy profitability. The Company's financial profile continues to strengthen through scheduled debt repayments. As of 9MFY26, approximately 82.5% of both the local and foreign financing facilities had been repaid, reducing leverage to 40.7% (FY25: 46.5%; FY24: 54.2%). The DSRA, maintained at two scheduled debt repayments and supported through an SBLC, provides additional protection against temporary debt servicing disruptions. Working capital requirements remain inherently low, as solar power generation does not require inventory or significant raw material procurement. Accordingly, working capital is managed through a combination of internally generated operating cash flows and short-term borrowing facilities. Despite maintaining a consistent dividend payout, the Company has continued to meet its debt obligations while preserving adequate liquidity.
Going forward, sustaining operational performance, maintaining prudent liquidity management and timely project related debt payments will remain important rating considerations.

About the Entity
Harappa Solar Private Limited was incorporated in September 2014 and operates an 18MWp solar power plant under the Renewable Energy Policy 2006. Commercial operations commenced in October 2017 following financial close in February 2017. The project was developed at a total cost of USD 24.4 million, of which approximately 75% was financed through local and foreign debt. The Company forms part of a broader renewable energy portfolio and is governed by a seven-member Board led by Chief Executive Officer Mr. Rana Uzair Nasim.