Saudi Arabian and Kuwaiti investors who hold shares in K-Electric (KE) have accused the Power Division, including the federal minister, and the National Electric Power Regulatory Authority (NEPRA) of actions that have harmed their financial rights in the power utility company.
According to sources, these allegations have led to the filing of international arbitration claims worth around 2 billion US dollars against the Islamic Republic of Pakistan. The arbitration has been initiated by Abdulaziz Hamad A. Al Jomaih, Combined National Industries Holding Company for Energy KSCC, and other claimants.
International law firms Steptoe and Omnia sent the notice of arbitration to Attorney General of Pakistan Mansoor Ali Khan and the head of the Attorney General’s Office International Disputes Unit, Sumair Siraj Khan. Copies were also sent to the Prime Minister, the Minister of Finance, the Minister for Energy (Power Division), the Minister for Law and Justice, the Federal Minister for Privatisation, the Secretary of the Special Investment Facilitation Council, the Governor of the State Bank of Pakistan, and the Secretary of K-Electric.
Sources said the claimants did not take this step in haste. They maintain that they informed the state at the time when violations of local laws occurred and gave multiple opportunities to resolve the issues. However, they allege repeated delays, unclear policy changes, or complete inaction by the state.
It is claimed that a Notice of Dispute was recently issued under Article 17 of the OIC Investment Agreement, but nearly three months have passed without the government taking part in any reconciliation process. As a result, Pakistan’s largest foreign private power investment has become commercially unviable, while certain politically favored parties have benefited from the state’s inaction.
According to the notice, K-Electric is a fully Pakistani power generation and distribution company in which the claimants have made long term investments since its privatisation in 2005. During this period, K-Electric was transformed from a corruption affected public entity into a profitable and professionally managed private company, leading to a significant reduction in system losses.
The statement adds that between 2005 and 2025, the claimants invested more than 4.7 billion US dollars in Karachi’s power infrastructure, resulting in savings of over 3 billion US dollars for the Government of Pakistan. Despite this, no profits have been distributed since privatisation, and all earnings were reinvested into the business. The claimants say that due to the state’s lack of cooperation, they were left with no option but to seek protection of their investment through international arbitration.
