K-Electric seeks $400 million foreign funding to meet rising power demand

KARACHI: K-Electric Ltd., Karachi’s major power distributor, is actively engaging with international financial institutions in an effort to secure approximately $400 million.

This funding is crucial to address the escalating power demand amidst Pakistan’s ongoing energy crisis, as reported by Bloomberg.

The company is currently awaiting government approval for its $2 billion capital expenditure plan spanning the next seven years.

This comprehensive strategy, outlined by CEO Moonis Abdullah Alvi in an interview, aims to achieve several key objectives.

By 2030, K-Electric plans to increase its renewable energy contribution to 30 per cent, expand its overall generation capacity, and fortify the existing grid infrastructure.

To guarantee a stable electricity supply, K-Electric intends to acquire minority stakes, each less than 20 per cent, in new power plants. Additionally, the company plans to facilitate the conversion of existing fuel oil power plants to coal, aligning with sustainable energy practices.

These initiatives have become increasingly urgent due to Pakistan’s recent challenges. The nation, once on the brink of default, now faces a severe fuel shortage, exacerbated by the surge in energy prices following Russia’s invasion of Ukraine.

Read more: Pakistan to finalise $10 billion refinery agreement with Saudi Arabia 

Consequently, household electricity rates have surged over the past year, sparking widespread protests across the country.

Furthermore, K-Electric is preparing for increased competition. Its longstanding monopoly as the sole electricity utility provider in Karachi is slated to end this year, prompting the company to strategize and adapt in anticipation of a changing market landscape.