K-Electric Limited recently concluded pivotal agreements with the Government of Pakistan, including the Power Purchase Agency Agreement (PPAA) and the Tariff Differential Subsidy Agreement (TDSA), in conjunction with the Interconnection Agreement (ICA). These were greenlit by the Economic Coordination Committee and endorsed by the Federal Cabinet. The ICA awaits approval from the National Electric Power Regulatory Authority (Nepra) before finalization.
The PPAA, effective for a year, aims to regularize KE’s power sourcing from the national grid. Concurrently, the ICA, also spanning a year, will empower KE to draw power up to the interconnection capacity, encompassing a secure supply of 1,000 MW.
Spanning a decade, the TDSA streamlines the process for KE’s TDS claims from the government. Additionally, a Mediation Agreement was penned between KE and government entities to resolve longstanding disputes concerning receivables and payables.
Officially, these agreements tackle critical legacy issues impacting Karachi and KE’s sustainability. After extensive negotiations, the signing of the TDSA and PPAA marks a crucial milestone for the power sector. Anticipation surrounds the pending approval of the ICA by Nepra, expected to enable the provision of affordable power to KE customers. The Mediation Agreement’s endorsement is vital for reconciling historical contentions between KE and Government entities over payables and receivables.
