PACRA Maintains Entity Ratings of ACT2 Din Wind (Pvt) Limited ( formerly: ACT2 Wind (Pvt.) Limited )

Act2 Din Wind (Pvt.) Limited (“Act2 Din Wind or the Plant”) is 50MW wind power plant located at Jhimpir, Sindh. Act2 Din Wind has signed Energy Purchase Agreement ("EPA") with CPPA-G for a period of 25 years from the date of COD, as per the EPA, in case of non-project missed volumes the power purchaser shall be liable to pay the missed volumes calculated using tariff rates. However, the project revenues and cash flows are exposed to wind risk, there is seasonal variation in the wind speed which affect the electricity generation, and ultimately cash flows may face seasonality. The plant successfully achieved its Commercial Operations (COD) On February 27, 2022 and has been supplying electricity to the national grid since then. The Company has adequate insurance coverage to cover the risk of business interruptions, marine & erection etc. During the period, FY23, Act2 Din Wind generated approx. 139Gwh of electricity and recorded topline of PKR ~1,960mln, with a Net Profit of PKR ~439mln respectively, being the first year of its operation. Working capital requirements of Act Wind are fulfilled through in-house adequate cash flow generation, without any utilization of short term borrowing lines. Free cash flows of the Company are in a comfortable position to make timely debt repayments. The Project is maintaining the Debt Service Reserve Account (DSRA), which is backed by 6 months SBLCs, in total providing coverage of six months on its financial obligations till maturity. The leveraging of Act2 Din Wind is yet sizeable and will gradually decline along with the life of the project as the repayment of project-related loan has started.
Comfort is drawn from the group association, having strong financial backing and relevant experience. Management has put forth the requisition for true up tariff to NEPRA, final decision in this respect is awaited. Upgrading operational performance in line with agreed performance levels is important. Sound cash flow generation remained congenial for the ratings.

About the Entity
Act2 Din Wind Pvt. Limited, incorporated in Nov 2015, is a Renewable Energy Independent Power Producer (RE IPP) operating under the Renewable Energy Policy 2006 by AEDB. Mr. Khurshid Akhtar is the CEO of the company. Mr. Khurshid has done his MBA from LUMS. The total estimated cost of the project is USD 62.952mln. Debt financing constitutes 80% of the project cost i.e. USD 50.36mln, which is financed from foreign financial institutions and locally from SBP under re-financing scheme at fixed rate 5%. The foreign facility has tenor of thirteen years with two years grace period and quarterly repayments while local loan has tenor of ten years with 2 years of grace period. The current sponsor of the project includes Akhter Group, Ismail Group, Tapal Group and, Din group, that owns 15.50%, 20%, 15.5% and 49% respectively.