K-Electric has allocated $1.5 billion of investment for upgrading and expanding power generation and distribution infrastructure over the next three years.
According to the official statement, the investments will spread across the entire power value chain. This includes expeditious completion of Bin Qasim Power Station (BQPS-III), along with setting up of new grid stations for power o -take of up to 1,400MW from the grid by 2023.
However, sustainable resolution of the government receivables issue and timely approvals by regulators remain critical to the execution of these investment plans. KE incorporated a wholly-owned subsidiary, KE Venture Company (Pvt) Ltd (KEVCL), to undertake different initiatives in the energy sector.
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Initially, the subsidiary will explore investments in renewable energy. Another wholly-owned subsidiary, K-Solar, has been incorporated under KEVCL, an official statement stated. K-Solar will specialize in distributed generation.
In addition, 150 megawatts of solar independent power producers in Vinder, Uthal, and Bela are going to be developed as joint ventures under KEVCL. The meeting was chaired by Shan Ashary, Chairman of the KE Board, with Moonis Alvi, the Chief Executive Officer also, in attendance and other members, according to a statement.
Shareholders were briefed regarding prevalent challenges such as the COVID-19 lockdown, continuous accumulation of outstanding net receivables from government entities (over Rs. 80 billion on a principal basis, as of September 30), increased finance cost (up by 166 percent), and the resulting distressed working capital situation.
Before the COVID-19 lockdown, KE showed strong operational performance, and up to March 20, recorded 3.1 percent growth in units sent-out, with around 2 percent points improvement in transmission and distribution losses, compared to the same period last year. However, significant drops in consumption by industrial and commercial consumer segments, the load-shedding exemption to high-loss areas, and the inability to carry-out theft detection activities adversely impacted the sales mix.
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In FY2020, KE invested over Rs. 55 billion across its energy value chain. Construction of the 900MW RLNG-run BQPS-III is being pursued on a fast track basis. Further, to enhance transmission capacity and improve overall network reliability, KE has completed over 94 percent of the TP-1000 project. KE has also converted over 9,000 pole-mounted transformers (PMTs) to aerial bundled cable. This has enabled the company to significantly reduce transmission and distribution losses and benefit consumers through reduced load-shed.
