PAK: KARACHI ELECTRIC SUPPLY COMPANY LTD. (KESC) POST-PRIVATIZATION REHABILITATION, UPGRADE & EXPANSION

The assistance finances the turnaround of KESC, a loss-making, integrated utility with an exclusive license to supply electric power to the city of Karachi and surrounding areas. Following nationalization of KESC in the 1950's, ADB has supported KESC with several loans over the last 30 years through its public sector operations. Initially, ADB's assistance was mainly directed towards upgrading of physical assets, but with an acknowledged lack of focus on governance and management reform. Later efforts have recognized this, and privatization of KESC became a priority in later ADB interventions in the sector. After KESC's privatization in late 2005, assisted by ADB, its new owners have embarked on a three-tier turnaround strategy based on (i) organizational restructuring and development; (ii) system balancing, modernization, and replacement; and (iii) generation capacity enhancement. The turnaround strategy requires capital expenditure during FY2007 to FY2009 of approximately PRs52 billion ($809 million): (i) generation rehabilitation and expansion, approximately PRs34 billion ($525 million); (ii) transmission and distribution (T&D) network investments, PRs17 billion ($268 million); and (iii) upgrading of commercial systems and rehabilitation of existing generation facilities, PRs1 billion ($16 million). In January 2014, KESC launched a rebranding strategy for its 100th year of incorporation, and changed its business name to K-Electric Limited.