DEL warns of default risk amid rising wind power curtailments

ISLAMABAD: Despite claims by the National Power Control Centre (NPCC) that issues facing wind power plants have been resolved, Din Energy Limited (DEL) has expressed serious concern over sustained and significantly increased curtailments imposed by the system operator on its 50 MW wind power project located in Jhimpir.
In a letter addressed to the Chief Executive Officer of the Central Power Purchasing Agency-Guarantee (CPPA-G), DEL Chief Executive Officer Fawad Jawed stated that the frequency, duration, and unpredictability of these curtailments have sharply reduced energy dispatch from the project, resulting in substantial revenue losses.
He warned that the resulting cash flow shortfall is placing severe pressure on the project’s financial position and its ability to meet scheduled debt-servicing obligations.
“If this trend continues, there is a real risk of default under the financing agreements. This situation is commercially unsustainable and undermines the viability of the project,” Jawed stated. He added that the continued and disproportionate curtailment of the project constitutes a direct violation of the applicable renewable energy policy framework.
DEL cited Section 8.2.1 of the Policy for Development of Renewable Energy for Power Generation, 2006, which states: “It shall be mandatory for the power distribution utilities to buy all the electricity offered to them by renewable energy projects.”
The company also referred to an Amendment Agreement to the Energy Purchase Agreement (EPA), executed in Islamabad on October 19, 2025. Under Article 2.3 of the agreement, the Government of Pakistan (GoP) undertook to facilitate and support the resolution of curtailment-related issues affecting the project.
Clause 2.3(a) of the agreement states: “GoP shall facilitate to address the issue of curtailment.”
According to DEL, this undertaking was a material assurance that formed the basis for maintaining the project’s financial stability and lenders’ confidence.
“Notwithstanding this commitment, curtailments have continued to increase, even after we agreed to the renegotiated tariff in good faith. The expectation was that the revised arrangement would help address operational and commercial concerns; however, curtailments have persisted and, in fact, intensified,” the CEO said.
DEL has sought urgent intervention to: (i) immediately reduce and rationalize curtailments;
(ii) give full effect to the facilitation commitment under Article 2.3 of the Amendment Agreement; and (iii) ensure priority dispatch and must-run treatment of the project as stipulated in the Renewable Energy Policy and the EPA.
The company warned that failing timely remedial action, it reserves all rights and remedies available under the EPA, the Amendment Agreement, financing documents, and applicable law.