KEL secures financing to improve transmission system

KARACHI: K-Electric signed two loan agreements with Chinese banks to improve its transmission system, a statement said on Tuesday. 

“K-Electric Limited has executed two finance agreements structured by Standard Chartered Bank, one for China Export and Credit Insurance Corporation (Sinosure) supported financing of $91.5 million,” the statement said. “Other (was) for Euler Hermes AG, Germany (Hermes) backed facility of Euro 46.5 million with Industrial and Commercial Bank of China, Bank of China and Standard Chartered as mandated lead arrangers and lenders.”

The statement said both the facilities are for a period of 10 years.

“This is the first Sinosure backed financing transaction for a private sector entity in Pakistan without government of Pakistan's sovereign guarantee,” it said.   The statement said the financing will be used by K-Electric to undertake a comprehensive and transformative upgrade of the K-Electric’s transmission system, “which will significantly improve the reliability, stability and efficiency of the K-Electric power network.”

The project will increase K-Electric’s transmission capacity by up to 1,000 mega volt amp, thereby allowing it to deliver more energy to its customers.

The statement said these financing agreements are part of $400 million investment by K-Electric into its transmission system, including the installation of new substations, transmission line equipment and grid stations.

K-Electric recently announced its TP-1000 Transmission Enhancement Plan in collaboration with Siemens Germany/Pakistan and Shanghai Electric of China.

The project is part of the overall future investment plan of $2.2 billion by K-Electric.

Under the project, K-Electric would add eight new grid stations comprising 220 kV and 132 kV network, bay extensions, six new auto transformers and efficiency expansion plan for 21 existing grid stations, which will also include addition of 30 power transformers and more than 400 new 11 kV feeders to cater the grid growth. 

Ten new 220 kV and 132 kV double and single circuit transmission lines of approximately 130-kilometre would also be laid out. 

Three existing 220 kV and 132 kV transmission circuits would be rehabilitated to increase the current carrying capacity and reliability.