Our city’s story is inextricably and inevitably linked with the utilities that have supported its growth. There have been improvements in various sectors serving the city, even though from the outside, the story may look bleak. And one can justify it given the current discourse on the sector and its overwhelming challenges, which trickle down to our bustling megalopolis as well. But the fact is that through highs and lows, castigation and complaints, we have nevertheless plowed forward to chart new frontiers.
Our city’s story is inextricably and inevitably linked with the utilities that have supported its growth. There have been improvements in various sectors serving the city, even though from the outside, the story may look bleak. And one can justify it given the current discourse on the sector and its overwhelming challenges, which trickle down to our bustling megalopolis as well. But the fact is that through highs and lows, castigation and complaints, we have nevertheless plowed forward to chart new frontiers.
Being an industry first, we are poised to revolutionise the way Karachi’s residents interact with its energy provider. A clear, comprehensive roadmap to digitise our services has brought us to a point where two out of every three customers engage with us through an industry-first portfolio of 24/7 services from an app to WhatsApp. Bill payments, new connection applications, and a host of other services can be accessed through automated processes.
With each iterative improvement, we are taking a stride towards our customers, building our understanding of their needs so that we can preemptively fulfil them. KE is reimagining customer engagement by leveraging data analytics to provide tailored solutions and seamless experiences across all touchpoints. This holistic approach positions KE not just as an energy provider, but as a forward-thinking partner in shaping a sustainable and customer-focused future for the energy industry.
A case in point is the fourth cohort of our pioneering Roshni Baji Program which is now complete where more enthusiastic females carried on the mantle of their predecessors to drive a culture of safety at the community level. These 50 women joined a growing network of a program initiated in 2021 at the intersection of gender equity, safety and community empowerment. Combined, they have educated 700,000 households on the safe use of electricity inside homes. In a sprawling city with the highest density of slums, unplanned mushroom growth creates unsafe conditions and an ever-present hazard in the form of faulty internal wiring. This is the first programme from Pakistan to have been recognised at the S&P Global Platts Energy Awards -- an honour for K-Electric and the country.
This agility and strategic depth are byproducts of privatisation, which provide the impetus for a transformation journey. An investment of $4 billion later, we have added 2 gigawatts of high-efficiency generation, tripled our distribution infrastructure, the customer base, and the energy served to these customers. Seventy per cent of our network is exempt from loadshedding, a number we aim to drive up as we look to the future. We have halved the transmission and distribution losses in the system, a Herculean task in Karachi’s challenging environment.
It has not been a journey without challenges. KE has successfully weaned off operational subsidies and has zero contribution to circular debt. It is an honour that a turnaround that was taught at Harvard Business School is a part of the privatisation journey acknowledged as a success by World Bank reports. However, the power sector continues to grapple with circular debt quickly becoming a vicious downward spiral.
As a country, we also need to create fiscal space to subsidise the cost of electricity to the customers. The system should not rely on ad-hoc decisions, but a thorough approach that maximises the benefit to all 40 million electricity users in the country
The federal government must be lauded for its progressive and can-do attitude towards the privatisation agenda amid these challenging circumstances, which can potentially bring in direly needed efficiency in the sector. An enabling environment is required to build a stable and sustainable energy ecosystem, which needs policymakers and regulators to work together and create robust, clear, long-term frameworks. These will equip us with strategic foresight to craft 10-year visions to drive maximum societal impact.
Exclusivity in the distribution sector has ended as of 2023. As policies roll out, the field becomes wider for new players -- with new expertise, new mindsets – to enter the market. In this vast new territory, we are benchmarking ourselves against the world’s best utilities. The transparency and speed of Entergy in the US; despite the immense urban challenges, we aspire to operational efficiency rivalling Tata DDL.
In the sustainability arena, we are enhancing the share of renewable energy in our mix to 30 per cent, emulating the strides of Pacific Gas & Energy which delivered 100 per cent greenhouse gas-free electricity to its customers in 2023. Renewable power projects of 640MW – including Pakistan’s first solar and wind hybrid plant -- have attracted global and local interest, including the country’s lowest bid for a solar tariff to date. The projects are awaiting Nepra’s final nod for award to the lowest bidder. The country’s only privatised utility would not have achieved these results if it had not followed its ambitions with tangible action. The resounding responses reflect the reputational standing and financial sustainability of our company, also endorsed in reports by the Asian Development Bank.
The investment we are leveraging over the next seven years as we pivot to become the utility of the future is $7 billion. The first 500 kV grid in our transmission network is now completed, connecting with the national grid to enhance access to affordable energy for Karachi. While the sector operates in a regulated environment, these interventions can reduce the variable cost of electricity by prioritising the cheapest generation sources first.
In uncertain economic conditions, clarity and predictability regarding the costs of electricity are invaluable in assuaging customer sentiments and reflect maturity in the sector as well. With time, standardising the processes to make the electricity rates cost-reflective in real-time could be a game changer for the industry, and may well become a necessity if the market inducts greater competition.
With all the opportunities, the road ahead will not be a walk in the park. Electricity theft continues to jeopardise the system from a financial, operational and safety perspective. Distribution companies operate within the national legal framework, which must be periodically evaluated and strengthened to act as a true deterrent. As a country, we also need to create fiscal space to subsidise the cost of electricity to the customers. The system should not rely on ad-hoc decisions, but a thorough approach that maximises the benefit to all 40 million electricity users in the country.
KE envisions a transformative future for Karachi, driven by global expansion, workforce development, digital innovation and corporate social responsibility. The future is full of promise, which can be unlocked by facilitating privatisation. Let fresh minds and fresh eyes tackle the challenges and reform the system from within. As the pioneers in this space, we are happy to share our experience as a learning opportunity for those to follow. This multifaceted approach is a part of our strategy to become a forward-thinking leader in the energy sector, driving sustainable growth for Karachi while making meaningful contributions to society and the global market.
The writer is a marketing and communications professional with a focus on the energy sector in Pakistan. He tweets/posts @imranrana21
