OPIC to finance up to $250 million in support of K-Electric
October 21, 2015
(OPIC)
Washington D.C. - K-Electric Limited (“K-Electric”) and the Overseas Private
Investment Corporation (“OPIC”), the U.S. Government’s development finance
institution, have executed a commitment letter for a US$250 million, 10-year
financing project in a signing ceremony attended by the Honorable Senator Ishaq
Dar, the Finance Minister of Pakistan. The ceremony was held at the US Chamber
of Commerce in Washington, D.C. today.
K-Electric supplies electricity to the city of Karachi, Pakistan’s most populous
city, as well as to nearby towns in the provinces of Baluchistan and Sindh.
Electricity outages and shortfalls are recognized as a key constraint to
economic growth and stability in Pakistan. The OPIC loan will be used by
K-Electric to undertake a comprehensive and transformative upgrade of the
K-Electric power grid. The K-Electric grid strengthening project will
significantly improve the reliability, stability and efficiency of the
K-Electric power network. The project will increase K-Electric’s transmission
system capacity by 33% (up to 1000MVA), thereby allowing it to deliver more
energy to its customers. The project will also help support K-Electric’s
loss-reduction measures and will include an innovative smart grid initiative to
more accurately distribute and utilize existing power.
The K-Electric project is eligible for OPIC’s support because of the
participation of Citibank N.A., Pakistan (“Citi”) in the form of a US$20.8
million direct loan to the project. The OPIC and Citi loans are part of a
US$450 million investment by K-Electric into its transmission and distribution
systems, including the installation of new substations, transmission line
equipment, grid stations and other transmission and distribution enhancements
and upgrades over the next 36 months.
Tayyab Tareen, Chief Executive Officer of K-Electric executed the commitment
letter on behalf of K-Electric and said, “We are extremely pleased to have OPIC
involved to support this landmark project, which will enhance our transmission
network and have a long-term sustainable impact on improving the power
availability in Karachi. The partnership with OPIC is an important building
block in our vision for the energy sector that we look forward to replicate in
our future efficiency improvement projects.”
“This exciting project marks another milestone in OPIC’s continued support for
Pakistan’s power sector – particularly in renewable energy. K-Electric’s
forward-thinking update of power transmission in and around Karachi helps to
build a reliable electricity foundation for the people of Pakistan. I commend
The Abraaj Group’s very impressive revitalization work with its partner company,
K-Electric, and OPIC is proud to be able to support the project,” said Elizabeth
Littlefield, OPIC’s President and CEO.
Nadeem Lodhi, Managing Director & Citi Country Officer, Pakistan commented
that, “We are delighted to catalyze this significant financing for K-Electric,
which reiterates our commitment to the country and restates our strategy of
leading innovative international financing solutions for our clients in
Pakistan.”
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