The project is part of K-Electric’s $2.2 billion investment plan, which seeks to add capacity across its vertically-integrated infrastructure – power plants, transmission lines, grid stations, switches and transformers.
But contrary to what was expected, the chief guest Asif stopped short of praising the private utility during the event at the Korangi Combined Cycle Power Plant.
“I am responsible for initiating the privatisation process of K-Electric,” he said. “For good or for bad – whatever happens, I will be held accountable,” he said.
Referring to the death of over a thousand people in Karachi last June after a heat wave swept through the city, he said K-Electric needed to invest in its infrastructure to address that ‘deficiency’.
In the same breath, he also reminded K-Electric that being a corporate entity it is responsible for persuading its customers to conserve electricity.
“We have become extravagant,” Asif said. “Concept of conservation is alien to us. Nowhere in the world do markets function till 2am in the morning. But this happens in Pakistan.”
He assured the power company of the federal government’s full support.
Sindh Senior Minister Syed Murad Ali Shah said electricity supply in Karachi has improved in the last couple of years.
“There is a lot of room for collaboration between federal and provincial governments. I believe Sindh is the solution to energy problems of Pakistan,” he said, referring to wind power plants in Jhimpir.
Investment in the transmission and distribution project named TP-1,000 is being made by a consortium of Siemens Germany, Siemens Pakistan and Shangai Electric Group of Companies.
TP-1,000 would ultimately enable K-Electric to handle an additional thousands of megavolt amperes by building eight new grid stations and enhancing the capacity of 21 existing stations.
Speaking about the confidence of investors in the power utility, K-Electric CEO Tayyab Tareen talked about $250 million financing the company was able to secure from Overseas Private Investment Corporation, the US government’s development financial institution.
K-Electric is also in the process of building a 700MW coal-fired power plant near Karachi. For some reason the government has not included it in the multibillion-dollar China-Pakistan Economic Corridor (CPEC) initiative.
All other proposed coal power plants are linked with the National Transmission and Dispatch Company (NTDC) system, which transmits electricity to every part of the country except for Karachi.
Being part of the CPEC helps give more credence to a project along with certain fiscal incentives. K-Electric is arranging loans and equity on its own along with its Chinese partners.