Privatization is a Way Forward to address Circular Debt: CEO KE
Staff Report
CEO KE Moonis Alvi has said that privatization is a way forward to address circular debt in the power sector.
He was speaking at a panel on the way forward for Pakistan’s power sector at the 7th Leaders in Islamabad Summit.
Moonis Alvi emphasized that privatization is the way forward to address circular debt, and the formulation of clear long-term roadmaps can help expedite the sector’s progress as well.
The panel discussion was led by Federal Minister for Energy Awais Ahmed Khan Leghari who shared that privatization was a key agenda item for the government, along with a holistic plan to ensure the stability and efficiency of the power sector in the interest of customers. High losses and Power Theft: Govt offers KPK to take control of Tesco, Pesco
Caretaker Minister for Energy Muhammad Ali also joined the panelists alongside the CEO of Lucky Electric, Ruhail Muhammad, and the Global Deputy President of ACCA, Ayla Majid.
Leghari articulated a vision that focused on overcoming operational issues while reaffirming the government’s commitment to bringing about a transformative change, entailing privatization of DISCOs, achieving tariff rationalization, and divesting the government’s interest in managing the power sector, given the fact that its responsibility lies in regulating it.
Moonis Alvi acknowledged that Pakistan has low per capita energy consumption, but this provides an opportunity to create policies and roadmaps that stimulate GDP and also drive demand.
The former caretaker Minister also cited that minor interventions can have a huge impact, sharing an example of the use of high-efficiency appliances. Replacing all fans, he shared, could result in savings of up to USS 1.5 billion per annum.
Panelists expressed keenness to use KE as an example of successful privatization to learn more about the challenges and opportunities.
They expressed an agreement that kick-starting the process of privatization could have a snowball effect and incentivize more investors to enter the field, as was observed with the telecom and banking sectors in the past.
Discussion also focused on sustainability. Federal Minister, in his closing remarks, spoke about steering focus towards indigenization in the fuel mix to bring down generation costs while also mentioning that hydel will also be focused upon for the next 6 to 8 years.
Moonis also shared that KE was receiving interest from various entities including international names for its 640MW RFP projects, which was a positive sign and part of the company’s future vision to integrate renewables into the mix.
Ayla Majid discussed the importance of an integrated strategy under the applicable policies and the possibility of enabling incentives for the adoption of energy-efficient resources. Investment in transmission and distribution Majid opined can only be injected by the private sector.
Minister for Energy Leghari shared that the government is working not just on privatization but also on creating the business environment for the power sector to thrive. He shared that CPPA was soon going to hold consultations with business leaders for comprehensive, accurate financial modeling.
