KARACHI: The net profitability of K-Electric declined by 84 per cent to settle at Rs1.5 billion in relation to last year’s Rs 9.44 billion mainly sharp devaluation in Pakistan Rupee (PKR).
A statement issued on Monday stated driven by continued and targeted investments of Rs 36.99 Billion across the power value chain, key operational indicators showed positive growth over comparative period.
However, despite showing consistent improvement in reduction of transmission and distribution losses of 1.5 per cent, and driving an increase in the units sent out by 2.8 per cent, KE’s net profitability declined by 84 per cent to settle at Rs 1.5 billion in relation to last year’s Rs 9.44 billion.
“The impact of KE’s operational performance was set-off by negative impact of Pakistani rupees’ substantial devaluation in the international currency market resulting in exchange loss of Rs 4 billion in comparison to last year’s gain of Rs 1.2 billion along with an increase in financing cost by Rs 1.4 billion due to increase in effective rate of borrowing and Mid-term review (MTR) decision.”
As of March 31, 2022, KE’s net receivables from various Federal and Provincial government entities stood at Rs 53 billion on principal basis. Delays in reconciliation and release of legitimate payments from these entities are severely affecting the Company’s cashflow position and ability to further accelerate investment in key power infrastructure.
Further, on March 01, 2022, NEPRA issued its decision on KE’s MYT Mid-Term Review, wherein NEPRA made a downward adjustment of Rs 0.22/kWh on the utility’s determined tariff and disallowed an additional investment of Rs 138 billion by KE to improve on its services including power supply and reliability.
An important update for this quarter is the finalization and deployment of KE’s 900 MW RLNG-based power project, BQPS-III. The first Unit of 450 MW proceeded with its mandatory testing in March 2022 as well as synchronization with KE’s Grid, and is now in the final testing stages before commissioning.
KE has also upgraded its infrastructure in its service areas to keep pace with and facilitate the economic growth in the city’s peri and suburban regions. Aside from rehabilitation, the grids in Winder are being enhanced and the 66kV line upgraded to 132 kV along with commissioning new lines to improve transmission capacity and reliability in the region. Additionally, to improve on capacity and systemic reliability, 6 new power transformers have been integrated into the network to ensure reliable power supply to consumers across Karachi.
On the distribution front, the Company continued to make strides on its loss reduction efforts. Over 200,000 KG of illegal hooks (Kunda) have been eliminated from the system in the first 9 months of the current fiscal year, and a total of 800 Pole Mounted Transformers have been converted to Aerial Bundled Cables (ABC), with around 125,000 new connections installed. Furthermore, to focus on customer centricity, 17 additional ‘Customer Facilitation Centers’ have been deployed to facilitate our customer’s billing inquiries.
In line with Sustainable Development Goals (SDG7), KE has signed an MoU with Sindh Energy Department (SED) and the World Bank (WB) for the establishment of solar projects with 350MW capacity. This tri-partite collaboration is set to add another 700 GWh to KE’s total clean energy supply and off-set 300-350 kilotons per annum of carbon emissions. KE has also partnered with Akhuwat and donated Rs 7.5 million as interest free microfinance loans to households for the installation of solar photovoltaic (PV) systems within the service territory of the Company.
Aside from sustainable development, KE is heavily invested in empowering individuals and communities. After the success of the first cohort of the Roshni Baji Neighborhood Women Ambassador Programme, an expanded batch of 60 women were inducted in November 2021. They will be on field for nine months across Karachi’s most densely populated neighborhoods. By the end of March 2022, the Roshni Bajis held discussions on safety and legal connections with over 210,000 households, bridging the gap between the utility and a key demographic of women consumers in Karachi. Separately, 11 women from the first batch of the programme have been hired as KE female Meter Data Maintenance Officers (MDMO). This programme has received international recognition at the S&P Global Platts, under the Global Energy Award. This is also the first time for an energy company in Pakistan to receive the coveted award and recognition.
In line with KE’s commitment towards safety, the Company initiated a comprehensive plan to revalidate the safety parameters on its High-Tension and Low-Tension network with the goal to improve on network resilience and uphold public safety; with 99 per cent of project completion achieved. Furthermore, KE’s HSEQ department conducted extensive Behavior Safety Management sessions for field staff to inculcate a culture of safety across the company.
KE continues to engage with stakeholders on finalization and execution of the Power Purchase Agency Agreement (PPAA) and Interconnection Agreement (ICA) for supply of 2,050 MW to KE from the National Grid along with a Tariff Differential Subsidy Agreement (TDS) for timely release of subsidy which will streamline the process for the utility and relieve the pressure on the company’s financial viability.