Tag: K-Electric

K-Electric Holds 112th Annual General Meeting

Karachi – K-Electric (KE) held its 112th Annual General Meeting (AGM) for FY 2022. The meeting was chaired by Moonis Alvi – Chief Executive Officer, KE who was authorized to chair this meeting by the Chairman of the Board Mark Skelton. The Chairman and KE Board members were in attendance virtually, while KE leadership was present in person.

KE’s operational performance has shown improvement on the back of sustained investments across the value chain. The company’s transmission and distribution losses improved by 2.2 percentage points, closing at 15.3% in FY22 from 17.5% in the previous fiscal year. This reduction also beat the target of 15.95% set by the regulator which is a noteworthy achievement. With capacity enhancement initiatives across the power value chain, KE was able to dispatch almost 20 billion units (19,800 GWh) of electricity to homes, offices, and industries across Karachi. In parallel, efforts to inculcate a culture of regular bill payments and engagement with community representatives improved recovery ratios for the company by 1.8 percentage points. Over 200,000 new customers have been added to the network taking KE’s customer base to 3.4 million.

However, these improved operational efficiencies were partly off-set due to the negative impact of additional PKR 9.5 billion recorded this year on account of the Mid-Term Review (MTR) decision, increase in impairment loss against doubtful debts, adverse exchange rate variations and increase in finance cost for the Company. K-Electric’s net profit stood at PKR 8,524 million in FY 2022 as compared to a net profit of PKR 11,998 million during FY 2021 which is 29% lower as compared to previous fiscal year. The Earnings Per Share (EPS) for the year also dipped to 0.31 rupees per share in FY 2022 as compared to EPS of 0.43 rupees in FY 2021.

KE Leadership also shared updates on current and future strategy and plans including the commissioning of the Black Start capability at Korangi Combined Cycle Power Plant (KCCP) achieved during the year, energization of power transformers resulting in capacity enhancement, construction of 500 kV and 220 kV grids to serve as additional interconnections with National Grid enabling KE to increase the off-take from National Grid along with a robust and aggressive investment plan focusing on renewables. However, for these planned investments to materialize, timely approvals from NEPRA and resolution of issues related to KE’s receivables from government entities and departments are critical.

Delegation of a Business Leaders from Saudi and Kuwait meet PM to discuss KE issues

A delegation of K-Electric’s majority shareholders representing Saudi Arabia’s Aljomaih Holding Company, Kuwait’s National Industries Group (NIG) and Infrastructure Growth and Capital Fund (IGCF) called upon the Honorable Prime Minister of Pakistan Mian Shehbaz Sharif on Thursday.

Delegation was led by Sheikh Abdulaziz Aljomaih – Managing Director of Aljomaih Holding Company, one of the strongest conglomerates in Saudi Arabia with interests in diversified industries along with Riyadh Edrees – CEO of NIG.

Prime Minister Shehbaz Sharif highlighted that he has constituted a task force headed by former Prime Minister Shahid Khaqan Abbasi to resolve the concerns related to K-Electric for improving the power utility’s cash flows and streaming generation of electricity from its power plants. Task force members including Shahid Khaqan Abbasi, Federal Minister for Finance, Miftah Ismail, Minister for Petroleum Dr. Musadiq Malik, and Special Assistant to Prime Minister Ahad Cheema were also present.

The delegation briefed the premier about the utility’s achievement in the last 17 years. “We enjoy good brotherly relations with Pakistan. This is why we opted to invest in the power sector – which is the backbone of any economy – of Karachi, which holds a special place as Pakistan’s financial and industrial hub,” highlighted Aljomaih who was also the first Chairman of the company post privatization.

“Aljomaih and I have been part of the KE journey since 2005. As part of the largest investment group of Kuwait, we are ambassadors of Pakistan in investment circles across the GCC. KE’s continued success can be instrumental in generating interest in Pakistan’s energy distribution sector,” shared Riyadh Edrees.

Post-privatization, over USD 4 billion has been invested in KE’s value chain, enabling it to upgrade the power infrastructure including addition of new power plants. The operational improvements since privatization have resulted in savings of USD 5 Billon to the national exchequer. Today, the company has doubled the number of customers, delivers twice the amount of energy units and has halved the transmission and distribution losses as compared to 2005.

The investors further informed that the transformation’s success has attracted investors like Shanghai Electric Power (SEP), one of the major players in the global energy sector. However, the acquisition process – which was formally initiated in 2016 – remained stalled due to unresolved issues, they informed.

The delegation also expressed its concerns over the industry’s growing challenges that are affecting KE’s financial sustainability. The delegation sought support from the premier on the resolution of long standing issues such as the Power Purchase Agreement (PPA) and the arbitration of historical dues between KE and various government entities, which are deterrents towards the sale of KE’s majority shares.

The group of investors were accompanied by Mark Skelton, Director of Infrastructure Growth Capital Fund, Shan Ashary, the Chairman of KE’s Board and Syed Moonis Abdullah Alvi, CEO K-Electric.

The delegation also called upon Dr Shahid Khaqan Abbasi, Minister for Energy (Power Division) Khurram Dastgir, as well as Tauseef H. Farooqi, Chairman National Electric Power Regulatory Authority (NEPRA).

During the meetings, KE’s investors acknowledged Pakistan’s importance as an investment destination. They expressed that considering the historical ties and brotherly relations between Gulf countries and Pakistan, the investment was made at the time when the government was actively looking for investment in the power sector. The delegation also reiterated its firm commitment to resolving the challenges and securing the city’s energy future, which is inevitable for the country’s prosperity.

KE has 3.2 million customers whereas T&D losses have reduced to 15.8% today down from 34.2% in FY05. On the generation front, KE has added 5 efficient power generation plants and fleet efficiency has improved from 25% in 2005 to 38% in 2021.

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