K-Electric, a Pakistani power company owned by The Abraaj Group, is set to build a 900MW plant near Karachi.
With an estimated cost of $1 billion, the project will also involve upgrading transmission infrastructure and represent the largest private sector investment of its kind in the country's power sector, according to K-Electric. The plant's primary fuel is expected to be regasified liquid natural gas.
The news comes about seven months after Abraaj agreed to sell its 66.4 percent stake in the company to Shanghai Electric Power, a Chinese utility, for $1.77 billion.
“While the transaction is yet to be completed, we are actively following K-Electric's plans which have been comprehensively outlined in their Multi-Year Tariff review petition. This is indeed an exciting milestone,” commented Wang Yundan, SEP's chairman.
Once the deal concludes, the Pakistani government will retain its 24.36 percent stake in the utility, with the remaining interest owned by minority shareholders including the International Finance Corporation and the Asian Development Bank.
China has been ramping up its involvement in Pakistan's power sector of late, signing an agreement with the Ministry of Water and Power to build a 4GW, $1.5 billion power transmission line in January.
The project forms part of the China-Pakistan Economic Corridor, a bilateral scheme comprising $55 billion worth of power and infrastructure projects.