KARACHI: The first 450 MW unit of RLNG-based BQPS-III project is scheduled to come online by May 2021 which would help improve K-Electric’s generation fleet efficiency from 38% in FY 2020 to 48% in FY 2023.
Chief Financial Officer KE, Aamir Ghaziani, in a corporate briefing held via webinar on Wednesday, reiterated KE’s commitment with taking Karachi to a power surplus position by 2022 and informed that upcoming 900 MW RLNG-based BQPS-III is proceeding as per expected timelines while of renewable energy projects of 350 MW were also in the pipeline.
He informed financial analysts from various brokerage houses and financial institutes that Work on the 220 kV Dhabeji Grid and transmission lines has started and finalization of contractual arrangements for the off-take of additional 1,400 MW from National Grid was in advanced stages he said and hoped that the National Transmission & Dispatch Company (NTDC) will complete necessary rehabilitation of the 220 KV Dhabeji grid along with implementation of “Cross Trip” scheme by March of 2021.
Conclusion of the interconnection agreement (ICA) with NTDC and power purchase agreement (PPA) with CPPA-G for 2,050 was crucial for off-take of additional power.
He claimed that KE owing to improved operational and financial indicators has turned around to earning profit in first half of fiscal year 2021 as in the first half of FY 2021 KE have recorded 4.8 % growth in sent-out, improvement in transmission and dispatch (T&D) losses by 0.6 pp and reduction in interest rates.
As part of project Sarbulandi the KE continued with the conversion to Aerial Bundled Cable (ABC) with more than 800 Pole Mounted Transformers (PMT) converted to ABC during first half of FY 2021, and around 10,000 PMTs overall Ghaziani said and claimed that it resulted in reduction of load shedding in Korangi, Orangi and Landhi with up to four hours on average.
Analysts were also briefed about key challenges to the sustainability of the company and project timelines which includes circular debt. As of December 2020, KE’s net receivables from various Federal and Provincial entities stood at around Rs. 77 billion on principal basis, which continue to put a strain on the Company’s cash-flow position.
Significant delays in approval of tariff adjustments, write off claims and investments approval remain a key concern for KE as they lead to significant accumulation of working capital requirement as well as create regulatory uncertainty he said adding that KE remains engaged with NEPRA for earliest resolution of the same.