Chinese firm awaits NoC to conclude K-Electric deal

KARACHI: K-Electric’s prospective Chinese buyer is awaiting no-objection certificate from the government to conclude over a billion dollars deal to purchase the integrated power utility.

Chairman Yundan Wang at Shanghai Electric Power Company Limited (SEPC), Chinese buyer of K-Electric (KE) and senior representatives of Abraaj Group called on Minister for Privatisation Daniyal Aziz on Friday.

“Matters concerning the transition of Karachi Electric to the new prospective company came under discussion, specifically the processing of no-objection certificate for the transaction,” a statement said.

Dubai-based private equity firm Abraaj Group, which bought a majority stake in 2009 in power utility KE, agreed in October 2016 to divest the 66.4 percent shareholding to the Shanghai Electric Power Company for $1.77 billion.

The Shanghai Electric Power Company’s delegation briefed the minister about their investment plan to revitalise KE. Chairman Wang indicated a plan to invest nine billion dollars in KE by 2030 to upgrade its transmission and generation capacity.

He hoped that the plan would change the prospects and perspectives of KE as a service provider in the power sector. “SEPC is responsible for generating one third of world’s power and they intend to replicate their successful experiences in Karachi as well.”

SEPC’s chief described its plans to introduce new technology to generate new electricity including from renewable sources. “Different sites are being identified to kick start the projects that will supplement generation of KE along with traditional sources.”

He also briefed the minister about his plans to stop leakages but emphasised that socioeconomic development of the target areas can play a major role in changing attitudes and in improving governance as well as recoveries.

Wang said KE will continue to extend electricity to designated hospitals as their social responsibility. “Special emergency generation vehicle to restore electricity in the wake of crises will also be made available to ensure non-stop provision of electricity in Karachi.”

The minister appreciated KE’s performance in the previous years that could bring apparent changes in the system and hoped that collaboration with the Shanghai Electric Power Company will help in improving the KE system.

The meeting ended with a note of thanks from the minister for privatisation with the hope to continue collaboration in joint ventures.