Research Analyst
Oct 15 - 21, 2012

Karachi Electric Supply Company (KESC) generates and supplies electric power to Karachi. KESC is one of the city's largest employers: around 11,600 people work for the company. It is also one of the oldest companies in Karachi and was established in the city even before the creation of Pakistan in 1947. Incorporated in September 1913, under the Indian Companies Act of 1882, the company was nationalized in 1952 but was re-privatized in November 2005. KESC came under new management in September 2008; a significant number of professional managers with experience in running utility and other large companies have joined this management. The company is listed in all stock exchanges of Pakistan.


EBITDA 3.5 17.4
Net profit/ loss (9.4) 2.6

During July-March 2010-11, the company's own generation stood at 5,469.8 million units (kWh), only 0.6 per cent less than the previous year generation of 5503.7 million units (KWh) owing to reduced availability of fuel gas. The supply of

KESC was supplemented by imports from WAPDA, IPPs' and rentals which totaled 5,664.7 million units (kWh) during July-March 2010-11 compared to 5,852.1 million units (kWh) in the same period last year.

The installed capacity of various generating stations stood at 1,821 MW against 1946 MW during the period. The reduction was the direct result of KESC's endeavor to replace old inefficient generation capacity with the new state of the art power generating station. Consequently an old power station of 125 MW was decommissioned in July 2010. The total units available to the company's system posted a decline of 2.1 per cent by reaching 10,714.71 million KWh during July-March 2010- 11 compared to 10,942.64 million kWh in the corresponding period of last year. Transmission and Distribution losses have reduced to 31.2 per cent in July-March 2010-11 from 34.5 per cent. Power purchase by KESC has decreased by 3.2 per cent during the period. In terms of additional generation capacity, KESC has made significant progress. The rental power agreement with Aggreko concluded in March 2011. KESC fleet consists of bin Qasim-1 power station, korangi combined cycle power plant, 560 MW BQPS II combined cycle power plant, korangi thermal power plant, korangi gas engine power plant and site gas engine power plant.

KESC has signed the 4th memorandum of understanding (MOU) with the citizens foundation (TCF), to provide free of cost electricity to TCF schools, which is one of the leading non-profit organizations in the field of formal education for the less privileged children of Pakistan. Under this MOU, KESC would bear 100 per cent cost of the electricity consumed by approximately 320 school units and TCF head office in Karachi. In addition, KESC would be working with TCF to provide meters to additional 46 schools units of TCF in Karachi. More recently, KESC is facing shortage of gas supply and has to increase loadshedding hours in different areas of the City. The company has hinted at increasing loadshedding hours in the city as it suffered from gas supply shortage of 40 per cent.


Pakistan is facing a number of challenges today, shortfall of electricity being one of them. The Government of Pakistan is working on all avenues to bridge the demand supply gap. Resources are being mobilized from both the private and public sectors. In addition to the short term power requirements, the government is also working on medium to long term power requirements of the country. Pakistan has been endowed many gifts by the Lord - water, wind, sun and coal being a couple of them. These natural assets can be utilized to generate electricity, which in turn will move the economy forward. Hydroelectric power generation has a potential of more than 60,000 MW in Pakistan. Coal as well holds colossal possibilities with reserves of around 185 billion tones mostly in Sindh province.


DESCRIPTION 2010-11 2011-12
Units generated (million units) gross 7,826 8,029
Units purchased (million units) 7,605 7,230
Units sold (million units) 10,059 10,277
T&D Losses (%) 32.2 29.7

During the fiscal year 2011-12, the electricity consumption pattern by economic group remained the same with domestic share of 43 per cent, industrial 26 per cent and agricultural about 12 per cent in Pakistan. During July-March 2011-12, consumption of electricity had increased in every economic group including domestic, commercial, industrial and public lighting which is a positive indication.

Pakistan needs to upgrade their power projects on cheaper fuels like coal to lessen dependence on oil due to which heavy amount of foreign exchange is spent on its import. This shift of fuel will also provide reliable electricity to the consumers and that too at affordable price.

Pakistan offers a stable investment environment and the government is very much clear about the fact that adequate power supply is a key for achieving growth targets today, in the era of international economic competition.

The Government also invites local and foreign investors with open arms to invest in the energy sector of Pakistan.


No doubt, all developed nations have qualified energy adepts who ensure cost saving, best utilization of resources and maximum benefit for the country. The continuous energy crisis in Pakistan is direct result of failure of policy makers who are least bothered about economic downturn and plight of the masses. The government should appointment of qualified energy adepts for resolving persistent energy crisis in Pakistan.