K-ELECTRIC LIMITED
Status: Approved investmentWhy disclosure?
FMO is committed to making publicly available relevant investment information that informs stakeholders and enables them to engage directly with FMO on its investments which, in turn, enhances our investment decisions, the design and implementation of projects and policies, and strengthens development outcomes. Learn more
In case of questions
In case of questions, please contact us at disclosure@fmo.nl
Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
K-Electric is the only vertically-integrated private power utility provider serving over 3 million residential and commercial clients in Karachi, Pakistan’s largest city. Active in generation, transmission, and distribution, the company generated 19,487GWh in the past financial year and a transmission and distribution network spanning across over 6600 square kilometers.
What is our funding objective?
The funds will be exclusively used towards transmission and distribution capital expenditures, with a specific view to 1) reduce (technical and non-technical) network losses, 2) improve safety, 3) increase the number of new connections, 4) allow better integration of renewable power to the grid, and 5) allow more electricity to be imported from the national grid.
Why do we fund this investment?
Within the past decade, there had been an increase in the demand-supply gap within Pakistan. However, following the introduction of new generation plants and entrance of Independent Power Producers, sustained investment in the transmission and distribution sector is required to channel the energy to demand centers. Since its privatization, KE has been working actively to develop its generation capacity alongside its downstream network to serve the Karachi area which is growing at a rapid pace. FMO and Proparco’s financing will support these efforts by allowing K-Electric to import more electricity from the national grid via development of new grids and transmission lines. Furthermore, the funding will be used to upgrade and refurbish existing transmission lines, allowing for a better integration of renewables power (wind, solar) in the K-Electric grid. In addition, a significant portion of the facility will be used to improve the distribution network. More specifically, the funds will be used to improve safety and make K-Electric’s distribution infrastructure more resistant to extreme weather and monsoons; to reduce electricity losses; and to support K-Electric’s investment in new connections in the face of Karachi’s continuous urbanization and influx of new residents and businesses.
What is the Environmental and Social categorization rationale?
The Company has a clear commitment, supported by its top management, to perform according to Good International Industry Practices, to address key environmental, health & safety (both in terms of the workforce and the community) and social risks, and to improve the sustainability of its operations. With this financing, FMO supports KE in their wish to become a leading organization in terms of these matters, as documented in a comprehensive environmental & social action plan. We have categorized this transaction E&S category A based on the high intrinsic risk of KE’s activities. IFC Performance Standards (PS) 1 - 6 are triggered. PS 7 and 8 are not triggered as KE’s activities are not impacting indigenous peoples or cultural heritage.
More investments
| Date | Total FMO financing |
|---|---|
| 12/16/2022 | EUR 0.14 MLN |
- Region
- Asia
- Country
- Pakistan
- Sector
- Energy
- Effective date
- 4/1/2022
- Total FMO financing
- USD 65.35 MLN
- Funding
- FMO NV
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - A