K-Electric (KE) reaffirmed the operational and financial advantages of its privatisation model during a corporate briefing hosted at the Pakistan Stock Exchange (PSX), amid heightened public scrutiny of the newly approved Multi-Year Tariff (MYT). The utility’s senior leadership, including Chief Financial Officer Muhammad Aamir Ghaziani, shared key insights into the company’s turnaround, efficiencies, and future investment plans.

Since its privatisation in 2005, and with over $700 million in foreign direct investment, KE has injected more than $4.6 billion into Karachi’s power infrastructure. These investments—funded through internal cash flows and a mix of debt and equity—have significantly improved generation, transmission, and distribution across the city.

Ghaziani said that if KE had not been privatised, such upgrades and efficiencies would likely not have occurred. “The sector may have been looking at a far greater circular debt burden today,” he remarked.

Highlighting the scale of savings, KE revealed that its operational improvements have contributed over Rs900 billion in cumulative financial benefit to both the government and consumers—savings that would otherwise have added to the national circular debt. Since 2005, KE has reduced its AT&C (Aggregate Technical & Commercial) losses from 36.6% to 23.1% in 2024, with a NEPRA-mandated target of 15.6% by FY2030. This projected trajectory is expected to generate Rs232 billion in annual savings by the end of the decade.

The CFO also addressed recent concerns over KE’s newly approved MYT. While KE had proposed a tariff of Rs44 per unit, NEPRA approved a lower rate of Rs39.98 per unit after applying its own benchmarking and prudence measures. Ghaziani clarified that this determined tariff does not affect consumer bills directly, as end-user pricing remains governed by the federal government’s uniform tariff policy.

Despite several key proposals being rejected—including a 1.5% retail margin, cap-and-floor mechanism for recovery losses, and O&M cost indexation—the approved MYT provides regulatory certainty and financial visibility for future planning, Ghaziani said.

He also sought to distance KE from the rising electricity bills and PHL surcharge, stating that the surcharge stems from circular debt accumulated by public-sector DISCOs, and that KE has “not added a single rupee” to this pool. Despite operating outside the federal subsidy and circular debt framework, KE’s customers are paying this charge like others across the country.

The CFO noted that KE’s distribution margin, including prior year adjustments, stands at Rs2.87/kWh—lower than that of many public-sector DISCOs, reflecting greater operational efficiency. Although NEPRA allowed partial recovery of losses, no retail margin was approved despite KE’s extensive retail operations, which include on-ground billing and collection teams.

Regarding its energy mix, KE clarified that higher costs stem from its dependence on RLNG due to limited access to cheaper, locally available gas. The company is also looking to diversify further, with plans to invest $2 billion in renewables, system upgrades, and grid expansion. KE has already launched Pakistan’s first-ever competitive bidding for renewable capacity, securing some of the lowest tariffs recorded in the country.

The briefing ended on an optimistic note, with KE expressing confidence that the approved MYT will pave the way for long-term infrastructure development and enhanced service delivery for Karachi’s power consumers.