KE awards $425mln contract for 900MW power plant

KARACHI: K-Electric (KE) has awarded around $425 million of contract to a joint venture of Chinese and German firms to build a combined cycle power plant with an installed capacity of 900 megawatts, the utility said on Thursday.

The contract was awarded to a consortium of Siemens and Harbin Electric International, which is expected to add the new power supply to the KE’s system by 2021.

“The KE board of directors at its emergent meeting held on 25 September, 2019 approved an award of EPC (engineering, procurement and construction) contract(s) to Siemens – Harbin consortium to establish 900MW combined cycle power plant at Bin Qasim.”

KE is the only vertically-integrated power utility in the country, serving more than 2.5 million customers across Karachi, Dhabeji and Gharo in Sindh, and Uthal, Vinder and Bela in Balochistan. It generates electricity from its own power generation units with installed capacity of 2,267MW. In addition, the utility has arrangements with external power producers for around 1,360MW, including 800MW from the grid.

The utility said the estimated contract value of the incoming project would be around $425 million. “The project will be executed on fast track and additional power will be available in summer 2021,” it added. “The project will positively contribute to bridge electricity demand-supply deficit in KE service area.”

While the existing installed capacity is sufficient to meet consumer demand that reaches near 3,000MW in peak hours of summer, the production falters on interruption in gas supply or system faults.

National Electric Power and Regulatory Authority (Nepra) said K-Electric has significantly reduced its transmission and distribution losses as compared to other power distribution companies in the country. Prior to 2009, KEL’s transmission and distribution (T&D) losses of 35.9 percent were at par with Hyderabad and Sukkur electric supply companies (Hesco, Sepco).

“Through a combination of loss reduction projects and initiatives such as use of aerial bundled cable, the company has mitigated the losses by 15.5 percentage points to 20.4 percent in 2018, whereas, T&D losses for Hesco and Sepco by the end of 2018 continued to loom over the same range of 29.8 percent and 36.7 percent, respectively,” Nepra said in a latest report.

KE said it has invested more than $2.1 billion in infrastructure upgrades across the energy value chain over the last nine years and planned to invest three billion dollars over the next few years. The company’s profit increased to Rs12.311 billion for the financial year ended June 30, 2018 compared to Rs10.419 billion a year earlier.