AEDB proposed to negotiate with US International Development Finance Corporation (DFC) on wind power projects

The Alternative Energy Development Board (AEDB) has proposed negotiations with five wind power projects funded by the US International Development Finance Corporation (DFC) to reach a mutually acceptable agreement and reduce tariffs. However, the DFC has indicated that it will not invest in Pakistan until the issues related to these wind power projects are resolved. Several committees have been formed by the government to address power sector issues, including higher profits made by independent power producers (IPPs). The government approved payment mechanisms and agreements with IPPs in February 2021. Among the 46 IPPs that signed amendment agreements, five wind IPPs were financed by the DFC.

The DFC has proposed a debt tenor extension and reduction in spread instead of tariff discounts for their projects. The CCOE directed engagement with the DFC to convince them to allow their projects to sign the agreements. However, the DFC has not accepted this proposal so far. The Power Division has formed a committee to engage with the DFC, but the DFC has declined to provide its acceptance. The AEDB suggests seeking approval for negotiations with the DFC to achieve a mutually acceptable solution and tariff reduction for the DFC-funded projects. The Minister for Power is also seeking opinions on the future course of action regarding the DFC wind projects.