Federal, Sindh govts show resolve to remove hiccups for smooth KE transaction

ISLAMABAD: The federal and Sindh governments have shown their resolve to expedite the process to remove all hiccups in the way of smooth sailing of belated K-Electric transaction to the Chinese company — the Shanghai Electric Power.

Hamad Aljomaih, MD Investments at Aljomaih Holdings, one of the largest business groups in Saudi Arabia having stakes in K-Electric, stated this after holding a series of meetings with top notches of the federal and Sindh governments during his two-day stay. Hamad Aljomaih arrived in Pakistan on March 15 and left the country on March 16.

During his stay, he spent one and a half day in holding a series of meetings with President Arif Alvi, Prime Minister Imran Khan, Finance Minister Dr Hafeez Shaikh, Federal Minister for Privatization Mohammedmian Soomro, Federal Minister for Energy Omar Ayub Khan and Special Assistant to PM on Petroleum Nadeem Babar and other senior officials and got the commitment to erase all the impediments, particularly the issue of receivables and payables in the way of the K-Electric’s transaction.

He also spent the remaining time in holding meetings with the Sindh government’s top functionaries, including Governor Sindh Imran Ismail, Provincial Minister for Energy Imtiaz Shaikh, Murtaza Wahab, Adviser to Chief Minister of Sindh on Law, Anti-Corruption Establishment, and Information, among others to this effect and got a positive response to ensure their help in the speedy transaction for K-Electric.

The talks also focused on KE’s continued commitment to Karachi, and its upcoming 900 MW power plant located at Bin Qasim. Abdulaziz Hamad Aljomaih expressed the hope that release of pending payments would enable the power utility to continue investing into the Karachi’s power infrastructure, and also remove hindrances to the signing of fresh agreements critical to improving the city’s demand and supply situation.

In a statement issued here on Wednesday, he expressed the hope that the Government of Pakistan would expedite the removal of any impediments to the conclusion of the Shanghai Electric Power’s (SEP) proposal to take a 66.4pc controlling stake in K-Electric Limited. Aljomaih is one of the largest investors in KE through the consortium that bought out the KESC in 2005.

Hamad Aljomaih was in Pakistan to seek resolution of challenges facing K-Electric, including the long-standing issue of payables and receivables involving KE and several government entities. Aljomaih expressed pleasure that the Government of Pakistan has assured that it will extend support in expediting the process of approvals so that held up Tariff Differential Claims to the tune of around Rs275 billion on principal basis, are released at the earliest, which would be in the absolute interest of further improving the city’s demand and supply situation, as well as improving the reliability and resilience of transmission and distribution system.

These issues have put a strain on the sustainability of the company, that has already done so much for the improvement of Karachi’s energy security, which has been greatly beneficial for the industrial growth of not just the city but also the country. Since its privatization, the group has invested more than US$720 million as equity into the company, which is still the single largest Foreign Direct Investment in Pakistan. This investment has allowed the company to invest more than $3.3 billion in Karachi’s power infrastructure.

The Saudi businessman, who has significant interest in several industrial and financial sectors internationally, is also chairman of the Arcapita Investments Bahrain, which had previously completed over 80 investments over the last 20 years with a total transaction value exceeding $30 billion in the United States, Europe, the Middle East and Asia. Established in 1936, Aljomaih Holding Company is a major industrial and commercial conglomerate having partnerships with some of the most prominent global companies, including General Motors, Pepsi Cola, Shell, Yokohama, and many other American, European and Japanese international brands.

Abdulaziz Hamad Aljomaih’s relationship with K-Electric goes back 15 years. He was the main driver of the privatization process of the company and also served as the first chairman of the Board of Directors when the power utility was privatised. He continues to serve on the board of KES Power, the company that holds a controlling stake in KE.

During his meetings with the Pakistani leadership, Aljomaih said that a strategic investor with utility expertise would leverage its strengths to bring further advancements, benefiting the consumers and economy at large. “K-Electric has been transformed into a utility that is attracting investors like Shanghai Electric, one of the major players in the global energy sector that has transformed the city of Shanghai from 3,000MW to 30,000MW. This would have not been possible ten or fifteen years ago. However, this is possible today when KE has been transformed into a top of the line integrated utility company of Pakistan. The transaction that has been lingering since 2016, when completed will open the doors to investment of billions of dollars into Karachi’s energy infrastructure.”