PM says K-E’s acquisition is ‘critical’ for foreign investment

CPNE discusses power issues and law and order of Karachi during meeting

The Council of Pakistan Newspaper Editors (CPNE) met Prime Minister Shahid Khaqan Abbasi in Islamabad on Monday. On the occasion, CPNE lauded the efforts made by the government to improve the security situation in Karachi.

The role of power utilities in improving the law and order situation was discussed and CPNE voiced its concern that K-Electric's (K-E) tariff has been completely changed and significantly reduced, which would mean that K-E would not be able to sustain its operations or invest in power infrastructure in the future. This would significantly set back the progress made in Karachi, including reviving industrial growth and improved law and order situation. Shanghai Electric Power (SEP), who have publicly announced their interest in acquiring K-E with an aggressive investment plan of over $9 billion, will walk away and terminate their plan to acquire K-E. The government and the regulator should create an investor-friendly environment with focus on attracting investment to ensure improved service for consumers.

The PM said that the government understands the need for investment in the power infrastructure of Karachi and its implications on the everyday life of Karachi and economy of Pakistan. He was fully aware of K-E's issues and assured the group that the federal government supports a right tariff regime for K-E, which ensures continuity of government policies, provides incentives for performance improvement and offers reasonable return.



Abbasi added that the acquisition by the SEP is critical to encourage foreign investment in the country and this will also be a game changer in the power sector of the country. He was aware that this is the largest investment in the power sector by a single company in Pakistan.

He also mentioned that Abraaj Group is a private equity firm, whose business model is to turn loss making companies into sustainable profitable entities and then sell it to a specialised strategic operator and earn a reasonable return.