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March 4, 2021

‘KE committed to ensuring surplus power for Karachi by 2022’

Karachi

March 4, 2021

The K-Electric remains committed to bringing Karachi to a power surplus position by 2022 through a series of planned investments across the power value chain. These investments, which would be subject to regulatory approvals, will allow the KE to benefit consumers and the economy at large.

This was stated by Aamir Ghaziani, chief financial officer of K-Electric, at a corporate briefing held via a webinar, which was attended by analysts from leading brokerage houses and other stakeholders.

The impact of Covid coupled with increased finance cost due to accumulated receivables from the government and its entities led to the KE reporting a loss in FY 2020. However, analysts were informed that the first half of FY 2021 had shown improvement in key operational and financial indicators, including 4.8 per cent growth in sent-out, improvement in T&D losses by 0.6 per cent and reduction in interest rates.

A statement issued by the power utility said this has helped turn around the KE back into profits in FY 21. KE remains committed to its vision of taking Karachi to a power surplus position by 2022. The upcoming 900 MW RLNG-based BQPS-III is proceeding as per expected timelines and the first unit of 450 MW is scheduled to come online by May 2021. This power plant will also help improve KE’s generation fleet efficiency from 38 per cent in FY 2020 to 48 per cent in FY 2023.

Apart from this, 350 MW of renewable energy projects are also in the pipeline. Work on the 220 kV Dhabeji Grid and transmission lines has started and finalisation of contractual arrangements for the off-take of additional 1,400 MW from National Grid (including 450 MW from existing interconnections) is in advanced stages.

The KE is hopeful that the National Transmission & Despatch Company (NTDC) will complete necessary rehabilitation of the 220 KV Dhabeji grid along with implementation of “Cross Trip” scheme by March of 2021. The conclusion of the interconnection agreement (ICA) with the NTDC and a power purchase agreement (PPA) with CPPA-G for 2,050 MW (existing 650 MW existing plus additional 1,400 MW) is crucial for off-take of additional power.

Project Sarbulandi, part of the KE’s Rs24 billion loss reduction investment from FY 17 to FY 23 is the power utility’s flagship initiative to uplift underdeveloped areas of Karachi by focusing not just on network health but also on community uplift activities and infrastructure development such as the construction of water filtration plants, rehabilitation of parks and schools and through free medical camps across the city. As part of Sarbulandi, the company has continued with the conversion to aerial bundled cable (ABC) with more than 800 pole-mounted transformers (PMT) converted to ABC during first half of FY 2021, and around 10,000 PMTs overall. The impact is already being felt in parts of Korangi, Orangi and Landhi.