Pakistan grants DESCO 20-year power license for DHA City Karachi, replacing K-Electric from October

Pakistan’s power regulator has granted a 20-year electricity distribution and supply licence to DHA Energy Supply Company (Private) Limited (DESCO), allowing the company to replace K-Electric as the electricity provider for DHA City Karachi from Oct. 1, 2026.

The National Electric Power Regulatory Authority (NEPRA) said DESCO had been awarded both an electricity distribution licence and a Supplier of Last Resort (SoLR) licence. Both licences will remain valid until Sept. 30, 2046.

According to NEPRA’s decision, DESCO will undertake electricity distribution within its designated service territory on a non-exclusive basis under the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997.

The approval means DESCO will replace K-Electric after the current supply arrangement expires on Sept. 30, 2026. The transition will transfer DHA City Karachi, a residential development on the outskirts of Pakistan’s largest city, to a new licensed electricity distributor.

NEPRA said it was satisfied that DESCO had the financial capability, technical expertise and operational infrastructure needed to provide electricity distribution and supply services. The regulator said the company had already established grid stations, transmission lines and a distribution network within DHA City Karachi.

Under the SoLR licence, DESCO will be legally required to provide electricity to all eligible consumers within its service territory without discrimination. The licence also requires the company to supply electricity if a competitive supplier fails to meet its contractual obligations.

NEPRA directed DESCO to comply with applicable laws, licence conditions, tariff determinations, procurement regulations and service quality standards. The regulator said that if a consumer tariff is not approved before the licences take effect, the company must file a tariff petition within 90 days of the licence commencement date.

The regulator said both licences are non-exclusive, allowing other licensed electricity suppliers to operate in the same territory as Pakistan gradually implements its Competitive Trading Bilateral Contract Market reforms. The reforms aim to separate electricity distribution from supply and encourage competition in the power sector.

DESCO, incorporated in March 2017 as a special purpose vehicle by Defence Housing Authority Karachi, becomes one of the first privately owned entities to obtain both electricity distribution and Supplier of Last Resort licences under the competitive market framework.

The company plans to initially procure up to 6 megawatts of electricity from Lucky Cement Ltd., with additional supply agreements expected from other nearby generators as operations expand.

The licensing decision marks another step in Pakistan’s electricity sector reforms, which seek to replace traditional monopoly structures with a competitive market model offering multiple licensed electricity suppliers.