President Zardari assures Shanghai Electric of amicable resolution to outstanding issues

President Asif Ali Zardari has assured Shanghai Electric that Pakistan remains committed to resolving all outstanding issues 'amicably’. He invited the Chinese energy conglomerate to explore further investment opportunities in the country’s power transmission and distribution infrastructure, state media reported on Monday.

The development took place during President Zardari’s visit to Shanghai Electric’s headquarters, just days after the company formally terminated its long-delayed $1.77 billion acquisition of K-Electric, citing Pakistan’s shifting regulatory and business environment.

The president met Chairman Wu Lei and visited company facilities in Shanghai, where he was briefed on Shanghai Electric’s operations in Pakistan, including projects related to Thar Coal, nuclear energy, and coal-fired power generation.

The meeting came less than a week after Shanghai Electric’s board of directors approved a resolution to withdraw from its bid to acquire a 66.4% stake in K-Electric from KES Power Limited.

The deal — originally signed in 2016 — had been stuck in limbo for nearly nine years due to overlapping regulatory hurdles, legal disputes, and economic volatility in Pakistan.

“Given that the counterparty has consistently failed to meet the conditions precedent for closing, and the changes in the business environment in Pakistan, this transaction no longer aligns with the company's international development direction,” Shanghai Electric said in a statement last week.

Despite repeated commitments by successive governments to resolve the regulatory bottlenecks, progress remained elusive. Shanghai Electric had originally agreed to acquire 18.3 billion shares of K-Electric — along with a $270 million performance-based bonus component — but the deal stalled following the need for multiple government approvals and unclear compliance requirements.

Thar coal projects

During his visit, President Zardari thanked Shanghai Electric for its contributions to Pakistan’s energy sector and economic development, especially its role in job creation and infrastructure expansion.

He emphasised the strategic importance of the Thar Coal project and highlighted the potential of coal gasification as a game-changer for Pakistan’s energy and agriculture sectors.

In a key development, the president also witnessed the signing of a Memorandum of Understanding (MoU) for the establishment of Pakistan’s first coal gasification and fertiliser project based on Thar Coal. The agreement was signed between MFTC Coal Gasification & Manufacturing (Pvt) Ltd and Sino Sindh Resources (Pvt) Ltd / Shanghai Electric.

This initiative is expected to not only help reduce reliance on imported fuels but also bolster agricultural productivity by supplying locally produced fertiliser. Shanghai Electric’s CEO expressed appreciation for the security measures provided to Chinese work force in Pakistan.

President Zardari reaffirmed his government’s commitment to ensuring a secure and investment-friendly environment for all foreign companies operating in the country.

Founded in 1902, Shanghai Electric is one of China’s leading state-owned equipment manufacturers, with a global footprint in energy, power, and industrial innovation.