Bhaijaan
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Interesting developments dear. Look at the timing, after UAE just last week pledged to take trade with India to 200 billion dollars and forge a long term defence partnership.
Saudi and Kuwaiti investors in K-Electric have filed a $2 billion international arbitration case against Pakistan, marking a dramatic escalation in a bitter dispute that has dragged on for nearly a decade. The case, filed on January 16, involves 32 Saudi entities including the prominent Al-Jomaih family and five Kuwaiti companies. Together, these investors hold a 30.7 percent indirect stake in K-Electric, Pakistan's largest private power utility serving Karachi.
At the heart of the dispute lies a collapsed sale to Shanghai Electric Power Company. Back in October 2016, investors agreed to sell a controlling 66.4 percent stake for $1.77 billion. Despite initial regulatory approval, the deal stalled for over eight years amid shifting regulatory conditions and delayed security clearances. Shanghai Electric eventually withdrew from the transaction. The investors are crying foul over what they describe as systematic government interference. Their complaints include unpaid tariff subsidies stretching back nearly two decades, which have strangled K-Electric's cash flows. Adding insult to injury, the government has slapped the utility with late payment penalties while sitting on these arrears.
The situation worsened last year when power regulator NEPRA issued final tariff determinations in May 2025. According to the investors, the government failed to notify these tariffs and instead reopened settled matters through what they call flawed review processes. The revised tariffs would reportedly cost K-Electric around 85 billion rupees annually, threatening the business's very survival.
The arbitration will be administered by the Permanent Court of Arbitration. The claimants have appointed Professor Stephan Schill as their arbitrator, and Pakistan now has 60 days to name its representative. K-Electric itself has stated it is not a party to these proceedings, though the outcome will undoubtedly affect its future.
Source: GEO News
Saudi and Kuwaiti investors in K-Electric have filed a $2 billion international arbitration case against Pakistan, marking a dramatic escalation in a bitter dispute that has dragged on for nearly a decade. The case, filed on January 16, involves 32 Saudi entities including the prominent Al-Jomaih family and five Kuwaiti companies. Together, these investors hold a 30.7 percent indirect stake in K-Electric, Pakistan's largest private power utility serving Karachi.
At the heart of the dispute lies a collapsed sale to Shanghai Electric Power Company. Back in October 2016, investors agreed to sell a controlling 66.4 percent stake for $1.77 billion. Despite initial regulatory approval, the deal stalled for over eight years amid shifting regulatory conditions and delayed security clearances. Shanghai Electric eventually withdrew from the transaction. The investors are crying foul over what they describe as systematic government interference. Their complaints include unpaid tariff subsidies stretching back nearly two decades, which have strangled K-Electric's cash flows. Adding insult to injury, the government has slapped the utility with late payment penalties while sitting on these arrears.
The situation worsened last year when power regulator NEPRA issued final tariff determinations in May 2025. According to the investors, the government failed to notify these tariffs and instead reopened settled matters through what they call flawed review processes. The revised tariffs would reportedly cost K-Electric around 85 billion rupees annually, threatening the business's very survival.
The arbitration will be administered by the Permanent Court of Arbitration. The claimants have appointed Professor Stephan Schill as their arbitrator, and Pakistan now has 60 days to name its representative. K-Electric itself has stated it is not a party to these proceedings, though the outcome will undoubtedly affect its future.
Source: GEO News
