Saudi Investor Acquires K-Electric Majority Stake

ISLAMABAD: Saudi investor Prince Mansour bin Mohammed Al Saud has inked a pivotal agreement to acquire a majority stake in K-Electric (KE), heralding a transformative phase in Saudi Arabia’s economic involvement in Pakistan’s energy sector.

This deal follows the withdrawal of Shanghai Electric Power, a Chinese firm, from its long-stalled $1.77 billion acquisition plan for K-Electric, citing persistent regulatory obstacles and shifting business conditions.

The Memorandum of Understanding (MoU), signed by Prince Mansour and AsiaPak Investments CEO Shehryar Chishti at Sindh CM House on Thursday, marks the largest potential Saudi investment in Pakistan’s power industry to date. It underscores Riyadh’s ambition to directly influence K-Electric’s management and strategic direction, the nation’s sole vertically integrated private power utility, serving over 3.4 million consumers in Karachi and surrounding areas.

The agreement arrives at a crucial juncture as Pakistan seeks to attract foreign direct investment (FDI) to stabilize energy supply, modernize infrastructure, and restore investor confidence within a challenging regulatory environment.

The leaderships of Pakistan and Saudi Arabia have endorsed the transaction, lauding it as a milestone in advancing Saudi-Pakistan business-to-business (B2B) cooperation and a testament to growing Gulf investment in South Asia’s energy markets.

Previously, Shanghai Electric Power, a subsidiary of the Shanghai Electric Group, pursued the acquisition of 18.3 billion shares in K-Electric since 2016. Valued at $1.77 billion with an additional $270 million in performance-based bonuses, the deal faced repeated extensions and delays due to Pakistan’s regulatory bottlenecks and tariff disputes. On September 9, 2025, Shanghai Electric’s board voted to terminate the acquisition after nearly nine years of stalled negotiations.

Industry sources noted that Saudi Arabia’s entry into K-Electric aligns with Pakistan’s power sector reforms under International Monetary Fund (IMF) programs and government efforts to enhance transparency and financial sustainability. The Saudi consortium’s move is viewed as both a commercial investment and a strategic endorsement of Pakistan’s ongoing economic reforms.

K-Electric’s current shareholders, including Gulf-based investors, have long expressed frustration over regulatory delays, particularly regarding multi-year tariffs and settlement of dues with the government and other power sector entities. The Saudi-led acquisition is expected to inject fresh capital and sharpen leadership focus to resolve these persistent challenges.

Prince Mansour’s involvement reflects Saudi Arabia’s Vision 2030 strategy, which emphasizes global energy partnerships and private-sector-driven growth. The Kingdom has already intensified investments in Pakistan’s mining, refinery, and energy transmission sectors, with the K-Electric acquisition adding a major urban utility to its expanding South Asian portfolio.

Shehryar Chishti, whose AsiaPak Investments holds a significant stake in KES Power and, in turn, K-Electric, played a key role in structuring the agreement. He described it as a “turning point for Pakistan’s power sector,” poised to unlock opportunities for modernization, technology transfer, and institutional governance. Both parties stressed their commitment to enhancing K-Electric’s operational efficiency, renewable integration, and customer service delivery under the new ownership structure.

The endorsement by both nations’ leadership signals deepening geopolitical and commercial alignment, with the energy sector serving as a cornerstone of their longstanding relationship, according to industry sources.

K-Electric, nationalized in the 1950s and privatized in 2005, has faced multiple ownership changes but continues to grapple with operational and regulatory challenges tied to Pakistan’s broader energy sector complexities. The Saudi investment could mark a pivotal shift by introducing management expertise, financial discipline, and an expanded regional partnership network.

Industry sources suggest that Saudi investors will prioritize strengthening K-Electric’s financial health, improving grid reliability, and advancing renewable integration to align with Saudi Arabia’s global sustainability goals. The partnership could also pave the way for broader Saudi participation in Pakistan’s privatization and infrastructure investment programs.

The acquisition reinforces Riyadh’s role as one of Islamabad’s key strategic and economic partners, signaling renewed global investor confidence in Pakistan’s regulatory and financial reforms.