Saudi investor signs deal for stake in Pakistan’s power company

The major shareholder in the power utility company of Pakistan’s largest city has signed a deal with a Saudi investor for the sale of its majority stake.

The Memorandum of Understanding (MoU) was signed by Shehryar Chishti, the owner of AsiaPak Investments Ltd, and Prince Mansour bin Mohammed Al Saud for the sale of a majority stake in the holdings of K-Electric (KE).

The agreement represents the largest Saudi investment in Pakistan’s power sector to date, effectively paving the way for Saudi participation in the management and future strategic direction of K-Electric, according to an official statement.

The governments of Pakistan and Saudi Arabia have formally endorsed and congratulated the parties involved, recognizing the transaction as a milestone in advancing bilateral business-to-business collaborations, the statement added.

The agreement was signed a month after Shanghai Electric Power Co. (SEP) officially terminated its $1.77 billion agreement to acquire a majority stake in K-Electric after nearly a decade of stalled negotiations and regulatory gridlock.

In a notice filed with the Shanghai Stock Exchange last month, the Chinese firm cited persistent failures by the KE existing shareholders to meet the deal’s preconditions, as well as shifting dynamics in Pakistan’s business environment, as reasons for walking away.

The deal, first unveiled in 2016, involved Shanghai Electric acquiring a 66.4% stake in KE — totaling over 18.3 billion shares — from KES Power Ltd., a consortium led by Saudi Arabia’s Al-Jomaih Group, Kuwait’s National Industries Group, and the now-defunct Abraaj Group.

The agreement also included up to $27 million in performance-based incentives tied to K-Electric’s operational benchmarks.

However, the deal had faced repeated regulatory delays, including prolonged issues around securing a National Security Certificate from the government of Pakistan — a key condition for the transaction to proceed.

Additional complications included outstanding receivables owed to KE by various government entities, which remained unresolved throughout the negotiations.