ISLAMABAD, Aug 28 (APP):The experts on Wednesday emphasized that privatization in the power sector was the only way forward to improve energy supply, access, and innovation in the system amid growing energy demands.
The Sustainable Development Policy Institute (SDPI) and Network for Clean Energy Transition (NCET) organized a consultative discussion on “Privatization of Pakistan’s power utility sector: Opportunities and the lessons learned.” The event also showcased a report launch on prospects of privatization of Pakistan’s power utility sector, a news release said.
Along with leading examples from across the world on privatization reforms, and potential challenges, the report that provided a critical review of K-Electric’s transformation journey, underscored that the power sector’s privatization was a strategic way forward to improve efficiency, achieve operational turnaround, and enhance consumer-centric initiatives.
In his welcome remarks, Deputy Executive Director, SDPI, Qasim Shah said the session has been convened to benefit from the lessons of K-Electric in the power sector.
He underlined that there were crises in the power sector including increased tariffs, taxation, political turmoil, and protests against power entities. The SDPI, he said has the mandate to provide advice to the government on key policy issues and social problems through dialogue with relevant stakeholders.
The current power crises, he said were mainly due to poor infrastructure, transmission lacunas, and outdated strategies.
Dr Khalid Walid, Research Fellow SDPI, in his presentation, provided a brief analysis of the report titled “Privatization of Pakistan’s Power Utility Sector: Opportunities and the Lessons Learnt”. He added that there is a troika of economic turmoil, energy crisis and climate change woes unitedly driving the mix issues in the country.
In the power sector, he said there are inefficiencies in infrastructure, transmission, and generation systems, whereas privatization is seen as a solution to reduce inefficiencies in the power sector. He also cited the global best examples of power sector privatization like in Chile and the UK that reaped convincing results.
In his keynote address, the CEO of K-Electric, Syed Moonis Abdullah Alvi said privatization of the power sector is the cornerstone of every sustainable development initiative for Pakistan. Before privatization, he said, K-Electric (which was KESC at that time) was receiving operational subsidies from the government to fund its operations which was reduced to zero after its privatization.
He said since privatization, KE has invested about USD 4 billion across its value chain. With regards to Tariff Differential subsidy (TDS), Moonis underscored that TDS was being provided to consumers of Karachi and not to K-Electric.
He also added that KE’s success as a private entity was also evident from the 15 bids that it received for its renewable projects because the producer had confidence in KE meeting its expectations. He added that KE was able to attract the lowest bid of 3.88 cents for its renewable projects very recently.
Ameena Sohail, Former Advisor National Electric Power Regulatory Authority (NEPRA) said that NEPRA’s role in privatization is important, adding, that post-2018, there has been tremendous development side on the regulatory side of the power sector.
Asad Mehmood, Energy Expert said the future of the electricity distribution companies (DISCOS) hinged on their ability to adapt and thrive in an increasingly competitive and regulated market. “One of the most pressing needs is to increase electricity sales, which is essential not only for revenue growth but also for the broader expansion of our energy sector. Every DISCO stands to benefit from selling more, but achieving this requires a shift from the status quo.
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