ISLAMABAD: Finance Minister Senator Muhammad Aurangzeb has convened an inter-ministerial meeting on K-Electric issues on Wednesday (Jan 29) on the proposal of Special Investment Facilitation Council (SIFC), engaged in resolving Saudi Arabia’s investment-related issues, well-informed sources told Business Recorder.
The issues to be discussed at the meeting are:
(i) generation tariff;
(ii) transmission, distribution and supply tariff;
(iii) KE’s write-off claims of Rs 68 billion;
(iv) KE’s shareholding dispute between Al-Jomaih and Asia Pak; and
(v) mediation agreement with government departments by Ashtar Ausaf.
The meeting will be attended by Minister for Power, Awais Leghari, Minister for Economic Affairs, Ahad Khan Cheema, SAPM on Power, Muhammad Ali, National Coordinator Power Task Force, Lt. General, Zafar Iqbal, who negotiated revised deals with IPPs, National Coordinator SIFC, Secretary SIFC Apex Committee, entire Authority of NEPRA, Chairman SECP and CEO CPPA-G.
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The sources said, KE filed write-off claims amounting to Rs 68 billion under its Multi-Year Tariff (MYT) for 2017–2023. These claims were reviewed during a public hearing conducted by NEPRA on December 10, 2024. The matter is currently under NEPRA’s verification process, and a decision is awaited.
The sources said, KE’s generation tariff has been approved while tariffs for transmission, distribution and supply are still under review. The Power Division has already submitted its comments on KE’s tariff.
KE’s top management recently met with the authorities in Islamabad to ensure a tariff structure that balances consumer and investor interests while maintaining the company’s financial stability.
A cost-reflective and sustainable tariff is seen as crucial for securing reasonable returns for KE’s foreign investors at par with other foreign investors.
According to sources, finalizing the tariff is essential for KE to implement its Nepra-approved investment plan, maintain service quality, and prioritize consumer interests. The delay in tariff finalization has hindered KE from completing its financial statements for the period after June 30, 2023, highlighting the urgency of this matter.
Another key focus of the meeting is KE’s investment plan. The Power Division has raised concerns over KE’s projected annual demand growth of 2.4%. By contrast, the Government of Pakistan has projected a 6% GDP growth rate under its “Uraan” initiative.
Furthermore, the recent increase in gas prices for captive consumers is expected to drive additional demand toward the national grid, potentially influencing KE’s growth assumptions.
Aligning KE’s investment plan with national growth targets is considered critical for effective energy planning, particularly for Karachi, Pakistan’s economic and industrial hub.
The meeting will also review mediation proceedings involving KE and several government entities, including the Power Division, NTDC, CPPA-G, SSGC, and KW&SC.
These proceedings aim to address longstanding disputes related to historical receivables, payables, and markup claims. Mediation sessions were held in May and August 2024, but further progress has been delayed due to procedural constraints.
The Power Division is seeking approvals from the ECC and the Cabinet to extend mediation timelines. Stakeholders continue to emphasize the importance of reaching an amicable resolution to these disputes.
Copyright Business Recorder, 2025