In a significant development, Saudi investors leading the consortium owning majority shares of Karachi Electric (KE) have expressed satisfaction with the progress made in resolving operational issues hindering the sale of the utility to Shanghai Electric Power (SEP), a prominent Chinese entity. The Pakistani government, through a committee established to address regulatory hurdles and payables issues, has successfully resolved three out of five key operational challenges, as reported by Al-Jomaih Holding Group, a major Saudi business conglomerate.
The consortium, comprising Al-Jomaih Holding Group, Abraaj Group, and Kuwait’s National Industries Group (NIG), acquired a 66.4 percent stake in KE in 2005. However, plans to sell the stake to Shanghai Electric Power have faced delays due to regulatory approvals and liquidity constraints stemming from circular debt within Pakistan’s power sector.
Shan Abbas Ashary, Chief Investment Officer of Al-Jomaih and a director at KE, highlighted the proactive measures taken by both the Saudi and Pakistani governments to expedite the resolution process. He noted the formation of a committee by the Special Investment Facilitation Council (SIFC), which includes ministers responsible for law, energy, and privatization, as a crucial step towards addressing remaining issues.
While expressing optimism about resolving the remaining issues within months rather than years, Ashary acknowledged Shanghai Electric’s renewed interest in the deal. He anticipated a reevaluation of their offer, considering the significant passage of time since the initial bid of $1.7 billion was made six years ago.
The progress achieved signifies a positive trajectory towards finalizing the long-awaited sale of KE, a pivotal utility serving Karachi, Pakistan’s largest city and commercial hub.
