K-Electric Secures Vital PPAA and TDSA Agreements with Government
Karobar
In a significant development, K-Electric Limited (KE) has officially inked a Power Purchase Agency Agreement (PPAA) and a Tariff Differential Subsidy Agreement (TDSA) with the federal government, as disclosed in the company's filing on the Pakistan Stock Exchange (PSX) today.
These agreements, alongside the approved Interconnection Agreement (ICA), have successfully navigated the scrutiny of the Economic Coordination Committee and received the stamp of approval from the Federal Cabinet.
Pending approval from the National Electric Power Regulatory Authority (NEPRA), the ICA is poised for signing. The PPAA, structured for a 10-year term, aims to regularize the existing power supply arrangement from the national grid to KE. Simultaneously, the ICA for the same duration will be executed.
Humbled to announce today is a landmark day for KHI as we sign agreements with GoP to secure firm electricity supply to Karachi up to interconnection capacity. This is a huge stride in addressing the energy trilemma for customers, also reducing subsidy burden on Govt. (1/2) pic.twitter.com/POvkVR4AWG — Moonis Alvi (@alvimoonis) January 5, 2024
With an eye on KE's planned investments in network interconnection capacity, the agreement positions KE to draw power supply, including a firm 1,000 MW, from the national grid.
The TDSA, also spanning a decade, is designed to streamline the filing, verification, and release processes for KE's Tariff Differential Subsidy Claims from the Government of Pakistan.
In addition to these pivotal agreements, a Mediation Agreement has been formalized between KE and Government Parties to address disputes related to historic receivables and payables.
Moonis Alvi, CEO of KE, expressed his satisfaction, stating, "Today marks a landmark day for Karachi as we finalize agreements with the Government of Pakistan to ensure a secure and firm electricity supply up to the interconnection capacity."
Critical role played by @PakPMO @MoWP15 & endorsed by @Financegovpk credit to @magmmz & @1sakhtar for taking this journey, initiated by @SKhaqanAbbasi Chair of PM’s Energy taskforce, to fruitful conclusion.Heartening to see business centric vision in Pk spearheaded by SIFC (2/2) pic.twitter.com/ha39pQciFw — Moonis Alvi (@alvimoonis) January 5, 2024
This accomplishment is a significant step in resolving the energy trilemma for customers while alleviating the subsidy burden on the government, he added.
Alvi acknowledged the instrumental role played by Caretaker Prime Minister Anwar-ul-Haq Kakar, Ministry of Energy, Finance Division, Caretaker Energy Minister Muhammad Ali, Finance Minister Dr Shamshad Akhtar, and Shahid Khaqan Abbasi in reaching this milestone.
