Karachi to be load-shedding-free by 2023: K-Electric plans over $2bn targeted investment: CFO

LAHORE: K-Electric plans targeted investment of more than $2 billion to make 93-94 percent of Karachi free of load-shedding by 2023 if the relevant agencies and authorities give required regulatory permissions and approvals in a timely manner.

"The magnitude of the projects needs to make Karachi 100 percent free from load-shedding need hefty investment. More importantly, these schemes need to be executed at the right time.

If these approvals are not delayed, we believe we can achieve the target," said Chief Financial Officer (CFO) K-Electric Aamir Ghaziani while talking to a select group of journalists here on Wednesday.

The new investment involves creation of own generation which includes the 900MW RLNG-based BQPS-III as well as interconnection facilities to procure more power from the national grid.

"We will have the generation required by the city but it will be very essential that infrastructure development and theft reduction is ensured in different areas of Karachi," he continued.

The company has already invested more than Rs330 billion in generation, transmission and distribution capabilities since 2005, the year it was privatized.

This includes conversion of more than 9,000 PMTs to theft-resistant Aerial Bundled Cable (ABC), which has also resulted in the decrease of transmission and distribution (T&D) losses by more than 16 percent to around 19 percent.

This is a significant improvement as according to NEPRA's State of Industry Reports, other DISCOs, have either seen an increase or stagnation of their T&D losses over the same period.

Moreover, it has added over 1057 megawatts during this period besides adding around 1000MVAs of transmission capacity.

Along with this there have been investments to upgrade the infrastructure of under-served and under-privileged areas of Karachi through project Sarbulandi to convert some VHL areas to ML and LL.

"K-Electric has invested everything it has earned back into the business since its privatization.

This investment has nearly doubled transmission and distribution capacity, more than 75 per cent of Karachi is now exempt from load-shedding," Mr Ghaziani asserted.

The distribution infrastructure in particular has been a key focus area for investments and nearly 900 feeders and 20,000 PMTs have been added to strengthen reliability.

"Despite several external constraints including power theft, delayed payments from government entities, KE has always prioritized Karachi," the KE official said.

"It's true that we and consequently our consumers still face the challenge of supply deficit. But with support from the government of Pakistan, this shall be addresses in the next two to three years.

With recent government's focus on Karachi and its power issues and support being extended we are confident that our planned investments over the next three years would ensure elimination of the supply deficit situation and consumers would see the benefits starting next summer."

In response to a question on the unending power supply problems of Karachi in spite of investments and infrastructure improvements, he said: "Karachi is not without its unique operational complexities, which challenge service delivery.

Almost a third of the city comprises unplanned settlements and encroachments; there is fragmentation and in some cases overlapping of civic responsibilities and in the absence of a master plan KE is unable to proactively plan its investments."

At the same time, he added, power theft is a very big challenge underpinned by law and order issues. "These issues are outside KE's control and we need support from other civic bodies and law enforcement. Similarly burgeoning dues from various governmental entities take a toll on KE's finances, drive up our borrowing and impacting our ability to make investments."

KE is often criticized for not investing in interconnection facilities when there is surplus power in the national grid.

"Delays in approvals from all relevant stakeholders affect KE's investment timelines and costs, and thus have a key role to play in timely resolution of demand-supply gaps.

Policy shifts have required investment plans to be revisited. KE is now working with the government of Pakistan and NTDC to ensure investments are made by required parties including KE and NTDC to ensure evacuation of power from the national grid."

Copyright Business Recorder, 2020