Financing will accelerate utility’s efforts to provide safe and reliable energy to Karachi
Karachi, The Hague, 12th April, 2022: Committed to creating sustainable cities and communities under UN SDG 11, KE achieved another milestone by securing USD 100 million in financing from Dutch Development bank FMO to enhance its transmission and distribution network across spanning 6500 km2 operational territory. These funds will be channeled towards providing its customers with secure, safe, uninterrupted, and reliable power supply.
The signing ceremony between KE and financing partners FMO and Proparco took place on Tuesday at the FMO’s Future of Energy Conference held at the Hague, Netherlands. Head of Treasury and Corporate Finance Muhammad Farrukh represented KE on the occasion and was joined by Ariane Ducreux Head of Head of Power and Infrastructure Division at Proparco and Huib-Jan de Ruijter, Chief Investment Officer from FMO along with senior management from both organizations.
The utility intends to use the funds to extend its infrastructure to previously unserved areas within its operational territory, bringing more residents into its growing customer base of 3.2 million. Alongside this, safety is a key priority of the investment plan that KE has outlined. Approximately 12,000 PMTs of KE’s distribution high loss network has already been converted to insulated Aerial Bundled Cables which provide power with safety, and the USD 100 million financing will accelerate the company’s efforts to convert its remaining network while removing hazards such as illegal hook connections (kundas) which create an unsafe environment for the public.
These funds will also enable KE to increase the capacity of its network to draw additional power from the National Grid for Karachi’s evolving requirements. Additionally, KE has envisaged the rehabilitation and enhancement of its transmission and distribution network in the remote areas of its licensed area in Balochistan.
Electricity demand in urban areas does not grow evenly, and power companies have to continually invest to ensure the infrastructure is capable of sustaining existing as well as future requirements. Part of this investment will be dedicated to its network of 71 grids and growing with a focus on augmentation. A combination of load balancing on existing power transformers with the addition of new equipment will be achieved through the resources available via this partnership, resulting in improved reliability of supply for customers and supporting their future growth.
Aamir Ghaziani, Chief Financial Officer KE, appreciated FMO for sharing KE’s commitment towards Karachi. He commented: “This investment will enable us to make our systems safer and resilient against changing climatic conditions, while also readying us to accommodate additional power supply from renewable energy sources and the National Grid. We have witnessed Karachi’s rapid urban growth and corresponding electricity demand, and KE is proud to be a partner in this journey towards prosperity since its privatization. We are thankful to FMO and Proparco for supporting our ambitions.”
Huub Cornelissen, Director Energy FMO, commented: “We are excited to have signed this secured 7-year term facility with K-Electric alongside our partner Proparco. This transaction — which brings our commitment within the Pakistani energy sector to over USD 200 mln — aligns perfectly with FMO’s Energy strategy. It enables K-Electric to onboard more renewable energy and contributes to SDG 8 in supporting decent work and economic growth, clearly highlighting FMO’s additionality in the sector.”
As a customer-centric and progressive entity, KE continues to seek opportunities to drive socioeconomic growth in Karachi. Sustained investments since privatization have resulted in a significant reduction in transmission and distribution losses and an increase in the percentage of the city receiving uninterrupted power to approximately 78%. Through strategic partnerships and continued investments, KE remains keen on being the top electricity provider of choice for its customers.