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Karachi's DHA City becomes first private entity to light up its own housing project
🇵🇰 Pakistan /Energy & Infrastructure

Karachi's DHA City becomes first private entity to light up its own housing project

From Dawn · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Approved/passed
  • DHA City in Karachi has become the first private entity to receive electricity distribution and supplier of last resort licenses from Nepra.
  • The licenses, valid for 21 years, allow DHA Energy Supply Company (Desco) to manage electricity distribution within DHA City.
  • Desco will procure electricity from Lucky Cement Limited and distribute it to consumers, overcoming objections from state-owned entities.

DHA City, a private housing project located on the M-9 motorway in Karachi, has achieved a significant milestone by becoming the first private entity to be granted electricity distribution and supplier of last resort (SoLR) licenses by the National Electric Power Regulatory Authority (Nepra).

The licenses, awarded for a period of 21 years to DHA Energy Supply Company (Desco), empower the privately owned entity with both distribution responsibilities and the role of SoLR. This move is a first under Nepra's revised regime for competitive trading and bilateral contracts, distinguishing it from legacy utility distributors.

Initially, Desco's distribution license will cover DHA City Karachi (DHACK), situated approximately 56 kilometers from Karachi city. The company has reported no existing infrastructure connection to the national grid or K-Electric (KE) network. Its sole nearby power source is Lucky Cement Limited, with whom an agreement has been made to procure six megawatts (MW) of electricity for distribution to residential, commercial, and other consumers within DHACK.

Nepra rejects objections of KE, Gepco and CPPA to grant distribution and SoLR licences to DHA Energy Supply Co.

— NepraHeadline summarizing the regulatory authority's decision.

Nepra's decision to grant these licenses to Desco came despite objections from state-owned entities like the Central Power Purchasing Agency (CPPA), Gujranwala Electric Supply Company (Gepco), and K-Electric. These entities raised concerns regarding Desco's financial health, technical capabilities, and track record. However, Nepra overruled these objections, citing amendments to its Act that promote liberalization in the power sector, including the separation of supply from distribution and the elimination of exclusivity in the distribution segment.

Nepra acknowledged that Desco, as a new company, might not yet fully meet all requirements. However, it recognized the strong financial credentials of its parent company, DHA Karachi, which is expected to provide support. The regulator emphasized that amendments to the Act facilitate reforms and competition within the electric power sector.

being a relatively new company and not in actual operation, Desco “is not fulfilling this requirement at this moment however, at the same time its parent company, DHA Karachi, has strong financial credentials and shall bail out its special purpose vehicle whenever required”.

— NepraExplaining the rationale for granting licenses despite the company's newness, citing the parent company's financial strength.
DistantNews Editorial

Originally published by Dawn. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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