K-Electric and Federal Government resolve dispute, pave way for sale to Shanghai Electric Power

This has paved the way for the sale of KE to Shanghai Electric Power (SEP).

KE urges govt to release Rs300 billion for additional 450MW power supplyThe Pakistani government and K-Electric (KE) have finally agreed to resolve a long-standing payment dispute.

This has paved the way for the sale of KE to Shanghai Electric Power (SEP).

Shanghai Electric's four new conditions to seal the K-Electric deal - TheCorrespondent.PK

In 2005, Abraaj Group, Aljomaih Holdings, and National Industries Group (NIG) purchased a 66.4% stake in KE.

In 2016, the consortium decided to sell its KE stake to SEP.

Nevertheless, due to outstanding payment issues with the government of Pakistan, which holds 24.36% KE shares, the transaction had not been concluded.

In March this year, Abdulaziz Hamad Al-Jomaih, the managing director of investments at Aljomaih Holdings, was in Pakistan to expedite the removal of impediments to conclude the SEP deal.

Our Journey - K-Electric

He had met with Prime Minister Imran Khan, President Arif Alvi, and other key officials in this regard.

On Sunday, KE representatives met with an inter-ministerial committee to resolve the outstanding issues.

“I’m glad to report that the Federal Government & KE have today agreed-upon principles to resolve most of their long-standing disputes regarding additional supply, payment procedures & subsidy disbursements,” Energy Minister Hammad Azhar said in a Twitter post on Sunday.

“We’ll be swiftly moving toward signing a new PPA (Power Purchase Agreement),” he added.

KE confirmed that both sides had agreed to resolve the issues within the “next few days.”

“Pakistani government representatives reaffirmed their commitment to Karachiites and indicated that the PPA would be inked shortly,” KE said in a written response to questions by Arab News Pakistan.

“Terms of Reference (ToR) document for arbitration of the long-standing dispute on payments will also be finalized in next few days.”

KE added that the release of pending payments would enable it to continue investing in Karachi’s power infrastructure and sign new investment agreements.

Analysts say the resolution of the issue is critical to solving the city’s power problems.

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