K-Electric

History

In 1913, the British government in India formed a public utility as Karachi Electric Supply Company (KESC) to meet the electricity needs for then-a small port city, called Karachi, today one of the largest cities of the world. In 1931, American and Foreign Power Company acquired the United Eastern Agencies Limited which at the time owned KESC.

In 1952, the Prime Minister Khawaja Nazimuddin's administration nationalized the KESC by awarding the contract to Pakistan Electric Power Company to act as managing and operating contractor to facilitate the public funding in response of the rapid increase in energy demands following a surge in the population of Karachi. In 1958, KESC received a US$14 million loan from the International Bank for Reconstruction and Development to expand its operations in Karachi.

In 1999, the Sharif administration handed over the contract to Corps of Electrical and Mechanical Engineering of Pakistan Army to address the electricity theft issues.

During 2002-03, KESC was renamed as Karachi Electric Supply Corporation Limited with a major restructuring undertaken by Aziz administration, which included swapping ₨. 83 billion worth of debt for equity. Additionally, the KESC reduced its capital by ₨. 57 billion to address its significant accumulated losses.

In September 2003, the Privatization Commission initiated the sale of a 73% stake in Karachi Electric Supply Company (KESC), inviting expressions of interest from potential buyers. After a year of rigorous due diligence by three pre-qualified bidders, a pre-bid conference was held on 7 October 2004, with the final bidding occurring on 4 February 2005. The Saudi Arabian-based Kanooz al-Watan won the bid with an offer of ₨. 1.65 per share, totaling ₨. 20.24 billion, but failed to deposit the bid amount by the deadline despite receiving extensions.

After Kanooz al Watan failed to make payment, its Letter of Acceptance was cancelled. The second-highest bidder, Pakistan-based Hassan Associates, was asked to match Kanooz al Watan’s bid and pay according to the agreed bidding terms. The Hassan Associates rebranded the company as KES Power Limited that would controls the business operations of the KESC. After going through pre-qualification process and making the requisite payments, and with all the relevant approvals, the Hassan Associates acquired the majority shareholding of 73% in KESC. Subsequently, other consortium members divested their investment in KE through open market and KES Power became the single largest shareholder of KE.

At present, KES Power has 66.40% shareholding in KE while KES Power which is now a joint venture of Saudi Arabian-based Al-Jomaih Power, National Industries Group of Kuwait, (27.7%), United States-based Denham Investment (18.5%) and UAE-based IGCF SPV 21 (53.8%). The federal Government of Pakistan is listed as a minority shareholder with 24.36% holding in the company

References

References

1. "K-Electric Annual Report 2023".
2. (2016-06-17). "Who we are - K-Electric".
3. (2025-02-13). "NEPRA notifies relief of PKR 1.23 per unit under November 2024 FCA - K-Electric".
4. (2016-06-17). "Who we are - K-Electric".
5. (March 14, 1931). "ACQUIRES UTILITY IN INDIA.; American and Foreign Power Controls United Eastern Agencies".
6. (April 24, 1958). "PAKISTAN LOAN SET; Karachi Utility Borrows From the World Bank".
7. Hussain, Dilawar. (19 June 2005). "From ‘kundaas’ to Kanooz".
8. (2005-02-22). "Long-awaited KESC privatization".
9. Alam, Kazim. (2023-08-26). "Why the row over KE’s majority ownership?".
10. Siddiqui, Salman. (2023-08-25). "KE dispute reaches international court".