KE Stake Sale Fails Amid Pakistan’s Economic Challenges
Shanghai Electric Power has officially withdrawn from its planned acquisition of K-Electric, dealing a major setback to Pakistan’s power sector modernization efforts.
The $1.77 billion deal, covering 66.4% of KE’s shares held by KES Power, had been under discussion for nearly a decade. Despite approvals from various regulators, progress stalled repeatedly.
SEP, in its statement, attributed the termination to unmet preconditions and adverse changes in Pakistan’s economic environment. The company stressed that the decision aligns with its broader international strategy and does not harm its overall financial health.
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Energy analysts believe the collapse reflects deeper challenges in Pakistan’s energy governance, including circular debt, regulatory uncertainties, and currency depreciation. “The deal was a chance to inject much-needed capital into KE, but persistent delays undermined investor confidence,” one Karachi-based analyst noted.
KE remains Pakistan’s only vertically integrated power utility, responsible for electricity generation, transmission, and distribution in Karachi. With SEP’s exit, KE must seek alternative partnerships or investments to sustain its operations and meet growing demand.
