KE signs contract for $650mln power project

KARACHI: K-Electric has signed a contract with a joint venture of Chinese and German firms to build a 900 megawatts dual-fired power plant with an investment of $650 million, the company said on Wednesday.

KE Chief Executive Officer Moonis Alvi, Siemens Executive Vice President Keramat Fakhari and Harbin Electric International Company Limited Chairman Guo Yu signed the contract.

The project – BQPS-III of 900 MW – will be built at KE’s Bin Qasim Power Complex and includes upgrades to associated transmission infrastructure. It will be dual fired with re-gasified liquid natural gas as the primary fuel and represents one of the largest private sector investments of its kind in the country’s power sector. KE said although the project timeline has been affected due to delay in finalisation of the company’s multi-year tariff, the power utility is determined to execute it on a fast-track and additional power to be made available by summer 2021.

Alvi said the BQPS-III is essential in meeting Karachi’s future energy demands.

“The aim is to commission the project in the fastest possible time, and we are confident that with the right facilitation from all quarters, power from the plant may be added to our supply as soon as summer of 2021,” he said in a statement.

The project is part of KE’s business plan formulated after detailed study to review all possible solutions for increase in generation capacity including long term off-take of additional power of national grid with the objective of bridging the supply demand gap and decommissioning of its old furnace oil based BQPS-I plan.

KE is also in talks with the government to increase the supply from national grid and in this regard discussions for supply of 500 megawatts from Karachi Nuclear Power Complex- (KANUPP) 2 and KANUPP-3 are in advanced stage.

Construction of interconnection facilities would take at least two years once the proposal is approved by the government, which is pending. A key coal-fired 700 MW project awaits notification from the government.

“All these planned initiatives are of utmost importance to not only bridge the demand-supply gap in Karachi but to also allow KE to replace older, inefficient furnace oil-based units with new lower cost and efficient generation units to lower the burden on consumers and on the

national exchequer,” the company said.

Yu said Harbin Electric International has accumulated rich project execution experience since it entered the Pakistani power market in 1983, and has completed more than 10 projects in the fields of hydropower, thermal power and combined cycle power stations.

“We are honored to partner with KE and confident that the under-development power project will play a crucial role in supporting the growing power needs of Karachi and will also help diversify the fuel mix of KE in a sustainable manner,” Yu said.

KE said it remains firm in its vision to provide safe and reliable power to all its customers underpinned by investments of around $3 billion over the span of next four years, across the power value-chain, resulting in energy self-sufficiency and propelling the socioeconomic growth of Karachi and Pakistan.

Helmut von Struve, managing director and CEO of Siemens in Pakistan said a reliable, robust and efficient electricity supply is essential to power economic growth and societal development, “and our global expertise in delivering such projects makes us an ideal partner to support K-Electric’s long-term vision”.

“We’re proud to be supporting the energy needs of Karachi with efficient, environmentally-friendly technology for power generation, such as the SGT5-4000F gas turbines renowned for high performance and low-cost power generation,” Helmut von Struve said.