GuarantCo provided a USD 50 million dual currency guarantee backed loan for K-Electric (KE) to support aerial bundled cable roll-out and smart grid solutions in Karachi, Pakistan.
GuarantCo supported K-Electric (KE) with a partial guarantee in favour of Standard Chartered Bank for a USD 50 million amortising 5.5-year corporate term loan facility, split equally between two tranches denominated in Pakistan Rupees (PKR) and US Dollars (USD).
Proceeds will be used to finance pre-identified capital expenditure projects including aerial bundled cable (ABC) roll-out, smart grid solutions and other distribution network maintenance initiatives.
The projects will result in long-term savings for KE through reduction in T&D losses, estimated to be around 20 percent of the power it generated in 2018, which will allow KE to further invest in infrastructure.
GuarantCo, through the PIDG Technical Assistance Facility (TAF), also provided a USD 185,000 grant to co-finance awareness workshops among key stakeholders about the hazards created by illegal electricity infrastructure. This project will also focus on high risk communities through women and children focused awareness sessions and will have a female empowerment angle as the training will be rolled-out by women in the communities.
The capital expenditure projects will improve the reliability of KE’s transmission and distribution (T&D) network and through the roll-out of the ABC insulated cables decrease theft and safety related risks, such as electrocution. This will directly benefit the citizens of Karachi and enhance KE’s capability to service additional consumer demand.
The ABC projects will mainly be targeted at high and very high loss areas in and around Karachi where the lowest income population typically live. This will ensure that people living in those areas will benefit from improvements to their existing connections in terms of safety and supply reliability. In addition, people outside these areas will benefit from additional power in the grid due to lower T&D losses.
KE works closely together with the community to first ensure the conversion of illegal hook connections to legal connections and prevent further theft through ABC roll-out. In addition, the company launches large-scale safety campaigns ahead of the summers and rains.