K-Electric Reveals Rs. 440 Billion Investment Plan For Tariff Control Period 2017-2023

Highlighting the need for investment in Karachi’s power sector for the continued growth of the city, K-Electric (KE) shared that the utility had submitted a revised investment plan of around Rs. 440 billion for the tariff control period of 2017- 2023. Per the Multi-Year Tariff 2017 – 2023 (notified in May 2019) determined by NERPRA for KE, the utility was allowed an investment plan of Rs. 299 billion. Subject to regulatory approvals, KE has submitted plans to make additional investments to the tune of around Rs. 140 billion more than allowed by NEPRA. ALSO READ Govt to Divest 20% of Its Stakes in PAKRI Via PSX The revised investment plan was developed keeping in mind the dynamic and challenging environment we operate in. This plan aims to ensure Karachi’s power infrastructure can cater to the rapidly growing energy needs of the city and its adjoining areas, invest in network reliability and safety initiatives while also driving fleet efficiency. Commenting on the plans, Moonis Alvi, CEO K-Electric, shared, It is pertinent to note that KE has already invested over Rs. 255 billion as of 2021 since the start of the tariff control period. KE’s 900 MW RLNG-based power plant at a cost of around USD 650 million is expected to be completed by the end of the calendar year 2021. This project is pivotal in meeting the city’s future demand growth. Since privatization, KE has also doubled its transmission and distribution capacity and achieved a significant reduction in T&D losses through effective loss reduction strategies. ALSO READ Cabinet Sets Cotton Intervention Price at Rs. 5000 per 40kg of Seed Cotton Going forward, KE is working with the Federal Government to build 500kV and 220kV interconnections at key locations where KE’s network connects with the National Grid, thus enabling the utility to off-take up to 2,050MW additional power from the National Grid, which currently has an excess of generation capacity. With support from the Ministry of Energy, NTDC, and CPPA, and under guidance from NEPRA, KE managed to off-take additional power from the National Grid, which enabled KE to ensure smooth operations during the summer of 2021. Further, coupled with the rapid installation of Aerial Bundled Cables that have resulted in good results in curtailing theft, KE also plans to expand the deployment of Automated Meter Readers on its network, which improves visibility of the network and provides greater transparency. The combined impact of these potential investments in generation, transmission, and distribution is expected to enable exemption of load-shed from around 78 percent of the city today to more than 90 percent by 2023. Since the tariff determined by NEPRA is a cost-plus tariff, KE’s investment plans are limited to those costs allowed as recoverable in the tariff. The allowance of these plans has no direct impact on the customer end tariff. On the other hand, if excluded, this could impact KE’s ability to seek funding for these projects, thereby adversely affecting the customers, particularly new connections, as well as safety and reliability up-gradation projects. ALSO READ Tabish Gauhar Proposes Solutions for Pakistan’s Power Sector Alvi further shared, CEO K-Electric, Moonis Alvi, concluded, ALSO READ Pakistani Payment Platform to Roll Out Services for Expats Across South Asia Since privatization, KE has been demonstrating its motivation and commitment to drive socio-economic progress by going above and beyond for the residents of Karachi and its adjoining areas. Aggressive investments of over USD 3.8 billion since privatization have enabled a drastic reduction in transmission and distribution losses, making KE the most improved distribution company in the country. Exempting industries from load-shed since 2010 has directly contributed to Pakistan’s GDP growth while also increasing employment opportunities. The percentage of the city exempt from load-shed has also risen to almost 78 percent on the back of additions in KE’s generation capacity, doubling of KE’s transmission and distribution network, and a significant reduction in losses.