K-Electric plans to invest Rs484bn over next seven years: CEO

ISLAMABAD: K-Electric has submitted an investment plan of Rs484 billion over the next 7 years to the National Electric Power Regulatory Authority (NEPRA) for approval.

It was revealed by K-Electric Chief Executive Officer (CEO), Moonis Alvi, during a session on “Breakfast with Jang” organized by the Jang Media Group here on Wednesday.

The K-Electric CEO said the investment plans hinges on further reduction in outages and losses, growth and reliability in the system to serve customers. He disclosed that the company was planning to count on locally-manufactured renewable energy by 30 to 40 percent for power generation in order to reduce dependency on imported fuels. He said Shanghai Electric’s offer for procuring K-Electric was still intact. “We have plans to acquire Hyderabad Electric Supply Company or Sukkur Company,” said Moonis.

K-Electric would reduce its dependency on imported fuel for power generation from 90 percent to 40 percent by 2030. There is a vision to use 30 percent of renewable energy for power generation in years to come, said the CEO K-Electric.

He added that they were expecting to sign a contract for the provision of 1,000 megawatt electricity from the federal government very soon.

The Kunda system, he said, was reduced significantly from the range of 500,000 -600,000 to 30,000-40,000 connections in certain areas.

The K-Electric chief said that focus on renewable and indigenous resources would not only bring production costs down but also shrink the country’s import bill, which was the need of the hour.

Responding to a question about the company’s performance in the area of line losses and recovery ratios, Moonis highlighted that since privatization, K-Electric had halved its T&D losses from 34.2 percent to 15.3 percent, improving beyond NEPRA’s benchmark for the year.

As of FY22, the company’s recovery ratio stood at 96 percent though inflationary pressures, compounded by government-mandated price increases in the current fiscal year, were affecting the ability of customers across the country to pay their bills, which may pose a challenge.

He also clarified speculation regarding the purchase of electricity at lower rates from NTDC and selling at a higher price, reiterating that the costs recovered from customer bills on a monthly basis were equal across the country under the Uniform Tariff Policy determined by the regulator.

Moonis said that each DISCO was provided a loss reduction target by NEPRA. If K-Electric, being a private entity, underperforms, the burden of line losses is borne by the company and not added to circular debt, he added.

During the discussion, former chairman BOI, Muhammad Azfar Ahsan said that he had seen the pre as well as the post-privatization era of K-Electric, and in his opinion, the company had improved its service delivery, which was a classic case study. Moreover, Azfar recommended that the state needed to protect the interest of investors.

Answering a question regarding exclusivity, Moonis underscored that KE welcomed competition in the greater interest of customers, which was why the company had voluntarily filed a non-exclusive tariff with NEPRA that would be implemented after completion of the current license in 2023.