Islamabad, June 23, 2022: A delegation of K-Electric’s majority shareholders representing Saudi Arabia’s Aljomaih Holding Company, Kuwait’s National Industries Group (NIG) and Infrastructure Growth and Capital Fund (IGCF) called upon the Honorable Prime Minister of Pakistan Mian Shehbaz Sharif on Thursday.
Delegation was led by Sheikh Abdulaziz Aljomaih – Managing Director of Aljomaih Holding Company, one of the strongest conglomerates in Saudi Arabia with interests in diversified industries along with Riyadh Edrees – CEO of NIG.
Prime Minister Shehbaz Sharif highlighted that he has constituted a task force headed by former Prime Minister Shahid Khaqan Abbasi to resolve the concerns related to K-Electric for improving the power utility’s cash flows and streaming generation of electricity from its power plants. Task force members including Shahid Khaqan Abbasi, Federal Minister for Finance, Miftah Ismail, Minister for Petroleum Dr. Musadiq malik, and Special Assistant to Prime Minister Ahad Cheema were also present.
The delegation briefed the premier about the utility’s achievement in the last 17 years. “we enjoy good brotherly relations with Pakistan. This is why we opted to invest in the power sector – which is the backbone of any economy – of Karachi, which holds a special place as Pakistan’s financial and industrial hub,” highlighted Aljomaih who was also the first chairman of the company post privatization.
“Aljomaih and I have been part of the KE journey since 2005. As part of the largest investment group of Kuwait, we are ambassadors of Pakistan in investment circles across the GCC. KE’s continued success can be instrumental in generating interest in Pakistan’s energy distribution sector,” shared Riyadh Edrees.
Post-privatization, over USD 4 billion has been invested in KE’s value chain, enabling it to upgrade the power infrastructure including addition of new power plants. The operational improvements since privatization have resulted in savings of USD 5 billon to the national exchequer. Today, the company has doubled the number of customers, delivers twice the amount of energy units and has halved the transmission and distribution losses as compared to 2005.
The investors further informed that the transformation’s success has attracted investors like Shanghai Electric Power (SEP), one of the major players in the global energy sector. However, the acquisition process – which was formally initiated in 2016 – remained stalled due to unresolved issues, they informed.
The delegation also expressed its concerns over the industry’s growing challenges that are affecting KE’s financial sustainability. The delegation sought support from the premier on the resolution of long standing issues such as the Power Purchase Agreement (PPA) and the arbitration of historical dues between KE and various government entities, which are deterrents towards the sale of KE’s majority shares.
The group of investors were accompanied by Mark Skelton, Director of Infrastructure Growth Capital Fund, Shan Ashary, the Chairman of KE’s Board and Syed Moonis Abdullah Alvi, CEO K-Electric.
The delegation also called upon Shahid Khaqan Abbasi, Minister for Energy (Power Division) Khurram Dastgir, as well as Tauseef H. Farooqi, Chairman National Electric Power Regulatory Authority (NEPRA).
During the meetings, KE’s investors acknowledged Pakistan’s importance as an investment destination. They expressed that considering the historical ties and brotherly relations between Gulf countries and Pakistan, the investment was made at the time when the government was actively looking for investment in the power sector. The delegation also reiterated its firm commitment to resolving the challenges and securing the city’s energy future, which is inevitable for the country’s prosperity.
KE has 3.2 million customers whereas T&D losses have reduced to 15.8% today down from 34.2% in 2005. On the generation front, KE has added 5 efficient power generation plants and fleet efficiency has improved from 25% in 2005 to 38% in 2021.
K-Electric (KE) is a public listed company incorporated in Pakistan in 1913 as KESC. Privatized in 2005 KE is the only vertically integrated utility in Pakistan supplying electricity within a 6500 km2 territory including Karachi and its adjoining areas. The majority shares (66.4%) of the company are listed in the PSX owned by KES Power, a consortium of investors including Aljomaih Power Limited of Saudi Arabia, National Industries Group (Holding), Kuwait, and the Infrastructure and Growth Capital Fund (IGCF). The Government of Pakistan is also a minority shareholder (24.36%) in the company.