In a groundbreaking development for the power sector, the Government of Pakistan and Karachi Electric (KE) marked a significant milestone by signing crucial agreements to reinforce Karachi’s energy security. The signing ceremony, held at the Energy Division on Friday, addressed longstanding disputes between the government and KE, particularly formalizing a secure power supply from the National Grid to Karachi.
The agreements, signed in the presence of Muhammad Ali, Minister of Energy, Power, and Petroleum, and Dr. Shamshad Akhtar, Minister of Finance, represent a crucial step in resolving legacy matters vital for Karachi and KE’s sustainability. The agreements include the Tariff Differential Subsidy Agreement (TDA) and Power Purchase Agency Agreement (PPAA), signifying a significant breakthrough for the power sector.
The Interconnection Agreement (ICA) is anticipated to be signed pending approval from NEPRA, ensuring a steady energy supply from the National Grid, making affordable power accessible to KE customers. The signing of a Mediation Agreement (MA) is equally important for reconciling legacy contentions on payables and receivables between KE and government entities.
Expressing gratitude, CEO of KE, Moonis Alvi, emphasized the momentous occasion, characterizing it as a paradigm shift in the energy landscape. He acknowledged the efforts of various stakeholders, including the Honorable Prime Minister, ministers, and task forces, in bringing these legacy matters to a close. Alvi highlighted the resolution’s potential to address energy challenges for Karachi customers and alleviate the subsidy burden on the government.
Minister of Energy, Muhammad Ali, lauded the signing as a crucial step in bringing efficiency and long-term stability to the power sector. He emphasized the commitment of institutions toward Pakistan’s progress and thanked Finance Minister Dr. Shamshad Akhtar for her personal involvement and support.
Dr. Shamshad Akhtar emphasized the importance of streamlining issues in the energy sector for national progress. She expressed confidence that these achievements would send positive signals to global investors eyeing Pakistan as a potential market, reinforcing the ongoing revolution in the energy sector.
The agreements, approved by the Economic Coordination Committee and the Cabinet, align with recommendations from the Prime Minister’s task force on Energy. The Caretaker Prime Minister’s assurance of support to KE’s major shareholder, Saudi Group Al Jomaih, in December 2023, further underscores the government’s commitment to the power sector.
