NEPRA proposes revision in agreement between Govt and KE

The National Electric Power Regulatory Authority (Nepra) proposed revisions in draft agreements between the Government of Pakistan (GoP) and K-Electric to align with updated regulations for sustainable implementation. The Economic Coordination Committee (ECC) didn’t approve the proposed drafts due to opposition from stakeholders, necessitating revisions. The agreements involve power supply, commercial codes, and subsidies, aiming to streamline operations, improve efficiency, and address financial disputes between K-Electric and the government.

These agreements include Power Procurement Agency Agreement (PPAA), Inter- Connection Agreement (ICA), Tariff Differential Subsidy (TDS), among others, aiming to resolve issues arising post-privatization of K-Electric in 2005. There’s a focus on aligning the agreements with updated regulations and resolving outstanding payments, regulatory issues, and enhancing K-Electric’s generation capacity.

The Power Division’s efforts to resolve disputes involve negotiations, the constitution of task forces, and committees to review and recommend solutions, aiming to achieve a breakthrough in resolving K-Electric’s long-standing issues. The agreements’ approval is crucial to streamlining payments and avoiding further additions to the circular debt.

The resolution of K-Electric’s issues is seen as a potential success story post- privatization and could pave the way for future privatization of other Discos (Distribution Companies), seen as a solution for sustainable power sector resolutions.

Recent discussions involving KE’s major shareholders and positive findings about KE’s performance in billing practices indicate the effectiveness of privatization as a viable solution for the power sector’s future.