Profile
Plant
The
30 MW ACT Wind Power Project is a renewable energy facility developed on a
Build, Own, and Operate (BOO) basis near Jhimpir village, Sindh, covering 197
acres. Operated as a Renewable Energy Independent Power Producer (RE IPP), the
project falls under Pakistan’s Renewable Energy Policy 2006, regulated by the
Alternative Energy Development Board (AEDB).
Tariff
ACT
Wind adopted the Upfront Tariff regime for wind power projects as determined by
NEPRA in 2013. At the time of financial close, the levelized tariff (Years
1–20) was US¢ 16.6932 or PKR 16.2926 per kWh. Following Commercial Operations
Date (COD) on 9th November 2016, the company filed for a tariff adjustment,
resulting in a revised levelized tariff of PKR 18.45 per kWh. As of the
April–June 2025 quarter, the tariff has been updated to PKR 29.0194 per kWh
after indexation.
Return on Project
ACT
Wind earns revenue primarily through the sale of electricity to the power
purchaser. The project’s cost structure includes a non-escalable component for
debt servicing, while ROE, insurance, and fixed & variable O&M costs
fall under the escalable component. The Internal Rate of Return (IRR), as
approved by NEPRA, is 13%.
Ownership
Ownership Structure
ACT
Wind is jointly and equally owned by three prominent Pakistani business groups:
Tapal Group, Ismail Group, and Akhtar Group, each holding a 33% equity stake in
the company.
Stability
Stability
in Independent Power Producers (IPPs) like ACT Wind is primarily derived from
long-term agreements signed between the company and the power purchaser,
ensuring predictable revenue streams. Additionally, ACT Wind’s ownership
structure contributes significantly to its overall stability, with equal
shareholding (33% each) held by three well-established and financially sound
business groups: Tapal Group, Ismail Group, and Akhtar Group. This balanced and
committed ownership base supports the project’s long-term financial and
operational resilience.
Business Acumen
ACT
Wind benefits from the strong business acumen of its three equal shareholders.
The Tapal Group has extensive experience in power generation and industrial
solutions, including ownership of TEL, a 126 MW Residual Furnace Oil-based
power plant supplying electricity to K-Electric. The Ismail Group owns Ismail
Industries Limited, one of Pakistan’s largest consumer goods companies, known
for its brands Candyland, Bisconni, SnackCity, and Astro Films. The Akhtar
Group brings expertise in manufacturing through Akhtar Textile Industries, a
leading denim producer, and has diversified into the dairy sector with the
launch of Dayfresh in 2009. This diverse industrial experience across energy,
FMCG, textiles, and dairy strengthens ACT Wind’s strategic direction and
operational capability.
Financial Strength
ACT Wind benefits from the strong
financial backing of its sponsors, who possess the capability to support the
company both on an ongoing basis and during times of financial stress. The
sponsors—Tapal Group, Ismail Group, and Akhtar Group—have well-diversified and
profitable business portfolios across energy, consumer goods, textiles, and
dairy sectors. This financial resilience enhances the company’s credit profile
and ensures stability in long-term operations.
Governance
Board Structure
The
Board of Directors (BOD) of ACT Wind consists of nine members, including the
Chief Executive Officer (CEO). Each of the three sponsoring groups—Tapal Group,
Ismail Group, and Akhtar Group—has three representatives on the Board, ensuring
equal representation and balanced decision-making among the shareholders.
Members’ Profile
Mr.
Maqsood Ismail currently serves as the Chairman of the Board. The Board
comprises individuals with extensive experience across diverse sectors,
including finance, accounting, project management, construction, and
manufacturing. This diverse expertise supports effective governance and
strategic oversight of ACT Wind’s operations.
Board Effectiveness
ACT
Wind’s Board actively engages in regular discussions focused on key operational
and financial matters. Topics such as plant efficiency, monthly budgets, and
overall performance are routinely reviewed, ensuring informed decision-making
and effective oversight of the company’s strategic and operational goals.
Financial Transparency
ACT
Wind ensures high standards of financial transparency. Its external auditor,
BDO Ebrahim & Co., an “A” category audit firm as ranked by the State Bank
of Pakistan (SBP), expressed an unqualified opinion on the company’s financial
statements for the year ended June 30, 2024, reflecting accurate and reliable
financial reporting.
Management
Organizational Structure
ACT
Wind follows a flat organizational structure, typical of Independent Power Producers
(IPPs). The internal team primarily consists of finance and technical staff,
while key functions such as engineering, construction, and plant operations are
outsourced to specialized service providers. This lean structure supports
efficient management and cost-effective operations.
Management Team
Mr.
Adnan Tapal, the Chief Executive Officer (CEO) of ACT Wind, has been leading
the company since assuming management control and brings over 20 years of
experience across various industrial sectors. He is supported by a seasoned
management team, including Mr. Mehmood Suleman, the newly appointed Chief
Financial Officer (CFO), who brings 35 years of extensive experience in
accounting and finance. Their combined leadership ensures strong strategic
direction and sound financial management for the company.
Effectiveness
The
management of ACT Wind has demonstrated strong effectiveness through consistent
and progressive performance. Their strategic decision-making has led to more
systematic processes and efficient operations. The presence of robust internal
controls reflects the strength of the management team and their commitment to
operational excellence, which has positively contributed to the company’s
stability and growth.
Control Environment
ACT
Wind maintains a strong control environment, supported by the use of advanced
IT solutions that enhance efficiency, accuracy, and oversight across
operations. The company’s IT infrastructure is well-developed, enabling
effective monitoring and control mechanisms. The breadth and depth of
activities managed through these systems reflect a mature and reliable internal
environment, contributing to the overall governance and operational integrity
of the organization.
Operational Risk
Power Purchase Agreement
Under
the Power Purchase Agreement (PPA), if ACT Wind maintains plant availability at
the contracted capacity of 31% and is ready to deliver electricity, the power
purchaser is obligated to pay the full tariff, even if no electricity is
dispatched. The payment is calculated based on the expected daily kWh
production, multiplied by the applicable tariff, providing revenue certainty
and effectively mitigating dispatch risk for the company.
Operation and Maintenance
ACT
Wind has entered into a 10-year Operation and Maintenance (O&M) contract
with Hydro China, starting from Commercial Operations Date (COD) in October
2016. Hydro China brings extensive expertise in the engineering, design, and
operation of renewable energy projects, with a strong track record both within
China and internationally, ensuring reliable and efficient plant performance.
Resource Risk
As a renewable energy IPP, ACT
Wind is inherently exposed to wind resource variability, which is a key
operational risk. Under the Renewable Energy Policy 2006, wind risk is defined
as the variability in wind speed that directly affects energy output. In line
with the Upfront Tariff mechanism, ACT Wind fully absorbs the risk associated
with wind variability, meaning any shortfall in generation due to lower wind
speeds directly impacts the company's revenues.
Insurance Cover
ACT
Wind maintains adequate insurance coverage, which includes protection against
property damage and business interruption. This coverage ensures financial
safeguarding of the company’s assets and operations in the event of unforeseen
incidents, contributing to overall risk management and operational resilience.
Performance Risk
Industry Dynamics
Pakistan's
power generation in FY-2024 dropped by 1.9% to 127,160 GWh, marking the second consecutive
annual decline, driven by higher electricity costs, rising inflation, and
reduced economic activity. Hydro power remained the largest contributor, making
up 31% of total generation, followed by RLNG and nuclear power, each accounting
for 19%. Local coal-based power plants contributed 12%, with the rest supplied
by other thermal sources, including imported coal. A small portion comes from
renewable resources like wind and solar.
Generation
The
plant has the capacity to produce 262,800,000Kwh of electricity, the generation
during FY24 declined due wind speed variation. However, the generation in 6MFY25
increased and looks promising to yield better results in FY25 as of April 2025
ACT Wind has generated 43 Gwh (FY24:74Gwh). During 6MFY25 the Company generated
revenues of PKR 959 mln (FY24: PKR 3,012mln, FY23: 1,935PKRmln).
Performance Benchmark
The
contracted efficiency of the plant is 31% and availability has been set up to
88%. The plant during 6MFY25owing to good wind speed performed according to the
agreed efficiency of 31%.
Financial Risk
Financing Structure Analysis
The
project is financed through debt constituting 75% of the total cost, amounting
to PKR 6,008 million, priced at 3-month KIBOR plus 3% per annum. The debt has a
10-year repayment period starting from April 2017, with repayments scheduled in
20 equal semiannual installments. A Debt Service Reserve Account (DSRA),
maintained via a Standby Letter of Credit (SBLC), holds funds equivalent to one
upcoming principal and interest payment to ensure timely debt servicing. As of
end-December 2025, the outstanding principal stands at PKR 1,945 million, with
the final installment scheduled for June 2026, completing the repayment cycle.
Liquidity Profile
As of
end-December 2024, Act Wind total receivables stood at PKR 429 million (FY24:
PKR 1,018mln, FY23: PKR1,145, FY22: PKR 1,339mln).
Working Capital Financing
The
Company is managing its working capital from internal cashflows generated. At
Dec24, Networking days stood at 107day (FY24: 113days, FY23: 204days, FY22:
204days). The Company has not utilized any short-term borrowing lines to meet
it working capital so far.
Cash Flow Analysis
As of
December 2024, the Company’s Free Cash Flows from Operations (FCFOs) stood at
PKR 296 million (FY24: PKR 1,694 million, FY23: PKR 705 million, FY22: PKR
1,255 million), primarily due to a decline in generation, which led to reduced
cash flows and consequently weaker coverage ratios. Interest coverage also
deteriorated to 1.2x in 1HFY25 (FY24: 2.2x, FY23: 0.9x), indicating reduced
headroom for meeting interest obligations. Additionally, since the loans are
denominated in USD, the company remains exposed to exchange rate fluctuations,
and adverse movements in PKR/USD parity could further strain debt servicing
capacity.
Capitalization
The
Company has a moderately leveraged capital structure, with leverage standing at
33% as of end-December 2024 (FY24: 36.5%, FY23: 53.3%), reflecting a consistent
downward trend due to scheduled repayments. The entire debt comprises a 100%
project-based long-term loan, indicating no additional corporate borrowings
outside the project scope.
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