ISLAMABAD: After a prolonged delay of seven years, the caretaker federal government and K-Electric on Friday signed three pivotal agreements to ensure a firm supply of power from the national grid to Karachi.

The fourth Interconnection Agreement (ICA) has already been approved by the Economic Coordination Committee of the cabinet. It will be signed as soon as the National Electric Power Regulatory Authority (Nepra) gives its approval.

Since 2016, these four agreements have been in limbo which not only cast a shadow over the assurance of firm electricity supply to Karachi but also raise concerns among international investors, especially those in the energy sector. The signing of three agreements has effectively dispelled this uncertainty, marking a positive turn for the city`s power landscape and the country`s investment climate.

On the regulatory side, K-Electric`s licence to supply electricity expired in July 2023. However, Nepra gave KE a temporary licence for six months to keep providing electricity to Karachi and nearby areas.

Meanwhile, KE has applied for a nonexclusive licence. Nepra has heard their application and the decision is now pending. Nepra will announce its decision anytime whether to further extend the interim licence or renew it for another 20 years.

The Power Purchase Agency Agreement (PPAA), the Tariff Differential Subsidy Agreement (TDA) and the Mediation Agreement (MA) were signedby the representatives of federal bodies and KE`s Chief Executive Moonis Alvi and Chief Financial Officer Muhammad Aamir Ghaziani.

The signing ceremony was witnessed by caretaker Energy and Petroleum Minister Muhammad Ali and Finance Minister Shamshad Akhtar.

In December 2023, caretaker Prime Minister Anwaarul Haq Kakar met the representatives of Saudi Group Al Jomaih, KE`s oldest and one of the largest shareholders, and assured them of support in resolving all issues faced by the power utility.

`We are tackling a Gordian knot in the power sector with a vision to bring efficiency and long-term stability. Today`s signing is one facet of this, where we have addressed legacy bottlenecks,` said Energy Minister Muhammad Ali.

He said his ministry is working hard to provide an enabling environment for the power sector to thrive because the ultimate beneficiary of `our interventions is the customer`.

He said this is the best news for Karachi consumers as power issues will be much more stabilised now.

Shamshad Akhtar said: `We believe that today`s achievement will also send a strong positive signal to investors across the globe who are eyeing Pakistan as a potential market. The energy sector is undergoing a revolution and we are committed to supporting it.

Moonis Alvi said that today is a momentous occasion for `us, representing a paradigm shift in the energy landscape as well`.

`We believe, the resolution of these matters will also enhance our journey towards sustainability as a company,` he remarked.