KARACHI: K-Electric, the sole distributor of electricity in Karachi, is facing a severe monetary crisis as banks have halted new financing and are rapidly recalling existing credit lines.
A staggering Rs65 billion in liquidity has been withdrawn from K-Electric accounts, with banks pulling back Rs30 billion directly from the power utility.
Tariff disputes are stated to be the primary factor behind this financial crunch, as K-Electric has yet to secure a finalized tariff framework for the 2024–2030 period. This prolonged delay has placed intense pressure on the company’s financial stability.
The National Electric Power Regulatory Authority (NEPRA) issued a tariff of Rs 39 per unit in 2025 after a two-year delay. However, NEPRA later took a suo motu notice, suspended that tariff, and issued a revised rate of Rs 32 per unit.
This significant reduction severely impacted K-Electric’s financial standing.
K-Electric challenged the revised tariff before the NEPRA tribunal, where a verdict on the petition is still pending.
Sources indicate that as financial pressures mount, K-Electric’s operational systems are being disrupted. Due to a severe cash crunch, procurement and other routine operational activities have begun to stall.
K-Electric has also formally written to the Pakistan Stock Exchange (PSX), stating that the ongoing legal dispute over the tariff is the primary reason for the delay in publishing its financial statements.
The letter explains that financial statements cannot be finalized while the tariff matter remains sub judice before the NEPRA tribunal.
Sources warn that if the tariff remains at its current lowered position, sustaining utility operations will become exceedingly difficult. Overall, the company has faced a staggering loss of Rs 80 billion.
