China’s Shanghai Electric has again submitted its expression of interest to buy Karachi’s sole power utility, the K-Electric (KE), Saudi Aljomaih Group’s investment consultant Shan Abbas Ashary has told the media.
Over six years ago, in October 2016, the Chinese firm had agreed to acquire 66.4% shares in the KE from the existing foreign shareholders at a price of $1.77 billion.
Ashary told a group of journalists on Tuesday night that six years had passed since that offer was made and hopefully the Shanghai Electric would raise the stakes to $2 billion now.
He added that if the Shanghai Electric and the KE reached an agreement this time, the citizens of Karachi would benefit a great deal from it.
He observed that the demand of Karachi should have been 5,000 megawatts by now.
Ashary continued that if all the city’s industries switched to electric power, this demand would increase rapidly.
In the context of the electricity ownership dispute that has been going on for the past few months, Ashary said that currently Saudi and Kuwaiti groups were the biggest shareholders of the KE.
He explained that Saudi Arabia’s Aljomaih Group and Kuwait’s National Industries Group (NIG) had 47% shares in the KES Power, and that constituted 30% shares in the KE.
He added that Asia Pak Investment Company had around 5% shares in Karachi’s power utility.
Ashary elaborated that the number of current investors in the Infrastructure Growth and Capital Fund (IGCF) was more than 80.
He continued that the UAE-based Mashreq Bank had also said that its 30% shareholding in the IGCF remained intact.
Ashary said that the number of shares of the Asia-Pak made it eligible for a member on the KE board and the power company was willing to give it that slot.
The Aljomaih Group’s consultant said if any Pakistani investor wanted to join them legally, they would welcome him.
Ashary said that Pakistan was the best place for Saudi Arabia and other Gulf countries to invest.
He pointed out that Europe did not have the same returns as Pakistan did because of its population decline.
He said that it had become very difficult for foreign companies to send back their profits, but after the establishment of the Special Investment Facilitation Council (SIFC), there was a glimmer of hope.
He continued that the SIFC's announcements about a one-window operation and facilitating foreign investors were encouraging.
Ashary said that he would hold a meeting with the officials of SIFC soon.
He added that during the last meeting of the SIFC, the issue of Aljomaih Group was raised, but so far there had only been talks and no practical steps were taken.
Ashary said the board of KE was fully active at present.
He continued that the KE board was holding meetings regularly and had also submitted a plan for heavy investment in Karachi to the National Electric Power Regulatory Authority (Nepra).
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