It took a decade of stalled deals, diplomatic nudges, and bruised egos, but the government has finally managed to untangle one of Pakistan’s longest-running corporate knots. The ownership dispute over K-Electric—the country’s only vertically integrated power utility—has been settled.
According to a report by The Express Tribune, Pakistani investor Sheheryar Chishty has agreed to step aside and hand over his controlling stake in K-Electric’s parent company, KES Power Ltd, to Saudi prince Mansour Bin Mohammed Al Saud.
The deal marks what officials describe as the largest Saudi investment yet in Pakistan’s power sector. It also points towards the growing importance of Saudi investors in Pakistan and the government’s willingness to make room for them where necessary.
According to Tribune’s report, the deal was achieved with mediation from the Special Investment Facilitation Council (SIFC) and behind-the-scenes diplomacy that reportedly involved Prime Minister Shehbaz Sharif’s own outreach to Riyadh.
The agreement ends a bitter ownership battle that had spilled into courtrooms and cabinet meetings. Saudi investors have been involved in KE in some capacity or the other for more than 20 years now. They first got involved in the company when the Musharraf Administration made the decision to privatize KE in 2005. Saudi and Kuwaiti shareholders have had stakes in KES Power since then, but when Mr Chishty entered the scene in 2022, they viewed it as a coup. His purchase of Abraaj Group’s old stake through his investment vehicle, AsiaPak Investments, has been hotly contested since then.
The Saudis have consistently demanded answers about his source of funds and pressed the Pakistani government to intervene. It is this persistence that seems to have paid off. For a company as politically sensitive as K-Electric, that resolution means more than just a change in shareholders. It may finally provide the clarity that foreign investors have demanded for nearly a decade. More importantly, it might be a significant success for the SIFC — the organisation created to make the lives of foreign investors easier.
A tangled legacy
To understand how Pakistan’s largest city came to rely on a company perpetually caught between investors and governments, one has to go back in time. K-Electric began life in 1913 as the Karachi Electric Supply Company (KESC). It was nationalized in 1952 and eventually privatized under Pervez Musharraf’s government in 2005, when 66.4 percent of its shares were sold to a consortium led by Saudi Arabia’s Al-Jomaih Holding Company and Kuwait’s National Industries Group.
The early years after privatization were difficult. By 2008, the Saudi-Kuwaiti consortium brought in Dubai-based private-equity giant Abraaj Group to engineer a turnaround. Abraaj’s founder, Arif Naqvi, invested more than $390 million into the company, injecting both capital and corporate discipline. Over the next eight years, Abraaj poured nearly $1 billion into generation and transmission upgrades, cutting losses and modernizing what had long been an aging, unreliable grid.
By 2016, Abraaj had transformed K-Electric into a company worth buying. Shanghai Electric Power, a state-owned Chinese firm, agreed to purchase the controlling stake for $1.77 billion. It would have been one of the largest foreign acquisitions in Pakistan’s history.
But what should have been a crowning moment for both Abraaj and Pakistan’s privatization drive quickly devolved into a bureaucratic nightmare. Approvals stalled. Regulatory agencies hesitated. Governments changed—five prime ministers in nine years—and no one could, or would, push the transaction through. Abraaj, meanwhile, continued to push and lobby for the sale. Despite Arif Naqvi’s personal connections and efforts, the sale continued to be stalled. KE had been an example of a successful corporate turnaround of a nationalised company that had been languishing for many decades. Now that it was time for the architects of this revival to reap the benefits, they were being told to wait.
Very quickly, the Shanghai Electric deal became a symbol of Pakistan’s inability to close. Despite repeated assurances and renewed applications, the Chinese suitor faced endless red tape.
Then came the fall.
In 2019, more than three years after the deal had first been struck with Shanghai Electric, Arif Naqvi and Abraaj were wrapped up in a global scandal of corruption and bankruptcy. Naqvi was accused of defrauding his clients and found himself in serious legal trouble. He was arrested and was set to stand trial. Meanwhile, Abraaj’s assets were stranded. One of these assets was KE. Naqvi had been desperate to sell KE because the proceeds from that might have allowed him to somehow evade his clients ire if he had successfully been able to use the funds from the sale to Shanghai to get them their money back. At the very least it would have given him more time.
The Shanghai sale, which had already been on life support, was now dead in its tracks until the dust from the Abraaj collapse settled. Shanghai Electric lingered for years, still sending polite reminders to Pakistan’s ministries that its offer stood. But by 2023, the Chinese firm had had enough. Last month, it officially terminated the bid, citing Pakistan’s shifting business environment and unfulfilled conditions.
In a statement that was blunt by diplomatic standards, Shanghai Electric said it was “no longer aligned with the company’s international development direction” and needed to protect shareholder interests.
It was the full stop on a saga that had begun with promise and ended in frustration.
For Pakistan’s investment community, the message was uncomfortable. Even as the government created the SIFC to fast-track foreign projects and woo investors, here was a flagship example of how difficult that could be. This needed repairing. It is why when President Zardari visited China, he made it a point to visit the headquarters of Shanghai Electric and assure them that his government would find a path for Shanghai and other foreign investors.
But the assurances were not enough. This was a clear governance failure at a time when the government has been heavily pushing foreign investment. They needed a clear win, but there was a small problem. While this entire saga was unfolding, someone else had quietly bought out Abraaj’s position in KE.
Enter Sheheryar Chishty
After Abraaj’s implosion, its ownership in K-Electric fell into the hands of liquidators managing a Cayman Islands-based fund known as the Infrastructure & Growth Capital Fund L.P. In 2022, Sheheryar Chishty, through his company AsiaPak Investments, purchased Abraaj’s share in KES Power via a special-purpose vehicle registered in the British Virgin Islands.
Chishty already had a presence in Pakistan’s infrastructure landscape, with holdings in Daewoo Pakistan and the Thar Coal-1 project. Buying into K-Electric was a high-stakes move, framed as both a vote of confidence in Pakistan and a business gamble.
But the acquisition was immediately met with resistance from K-Electric’s existing Gulf shareholders. They refused to recognize him as a legitimate partner, citing the absence of board elections that would reflect his stake. The resulting deadlock left Karachi’s main power supplier in limbo, with no clear leadership or strategic direction.
This publication has covered the entire saga every step of the way, chronicling how K-Electric, once considered a model for privatization, had become emblematic of state paralysis and corporate drift. As we noted then, governance issues were compounded by managerial controversies and slipping bill recovery rates, while the company failed to keep up with the rise of solar energy among residential users.
At the same time, Chishty was fighting a brutal legal battle to try and get control of the company, and eventually get his seats on the board so he could take the helm of KE. Unfortunately for Chishty, the old guard investors were not prepared to let go.
A government under pressure
By mid-2025, the ownership dispute had escalated into a diplomatic irritant. Saudi and Kuwaiti investors reportedly raised the issue directly with Pakistani officials, expressing frustration over regulatory obstacles and demanding that the matter be resolved.
Sources quoted by Tribune said the Saudis were particularly concerned about Chishty’s acquisition, questioning the origin of funds and viewing his actions as a hostile takeover attempt.
The matter reached Riyadh during Prime Minister Shehbaz Sharif’s visit earlier this year. Soon after, the SIFC was tasked with finding a solution acceptable to all parties. The result was the deal signed in Karachi: Chishty’s exit, and Prince Mansour Bin Mohammed Al Saud’s entry as the new majority stakeholder in KES Power. To cement this, an MoU was signed between the CEOs of Trident Energy Pvt Ltd KE to establish hybrid solar and wind power plants.
Standing behind the two CEOs were Chief Minister of Sindh Murad Ali Shah and Prince Mansour bin Mohammad bin Saad Al Saud — who is also the Chairman of the Saudi-Pak Joint Business Council.
For the government, this outcome ticks several boxes. It makes long-standing Gulf partners happy, secures new Saudi investment, and restores a semblance of order to an essential utility. For Chishty, it marks the end of a turbulent two-year chapter and what can be considered a successful exit, even if a quick-out-the-door approach was not the one he initially entered the scene with.
What comes next
Saudi investors have been part of K-Electric’s story since privatization, but their role has mostly been passive. For nearly two decades, Al-Jomaih Power Limited and Kuwait’s National Industries Group have held large stakes in KES Power, yet they have struggled to assert managerial control or reap consistent dividends.
Now, with a member of the Saudi royal family taking direct interest, that dynamic may change. The signing ceremony in Karachi was not just a formality. It was attended by senior officials, business leaders, and members of the Saudi delegation led by Prince Mansour Bin Mohammed Bin Saad Al Saud, who also chairs the Saudi-Pakistan Joint Business Council.
The prince outlined the Kingdom’s intent to deepen investments in Pakistan’s energy, mining, and tourism sectors. The message was clear: Riyadh sees K-Electric not as a legacy asset but as a gateway to broader economic integration with Pakistan.
For Pakistan’s policymakers, eager to attract capital under the SIFC framework, that message could not come at a better time.
The immediate effect of this settlement is a long-awaited resolution to uncertainty. With Saudi ownership consolidated, the company finally has a clear chain of command. That alone could unlock stalled decisions on tariffs, investments, and management appointments.
Still, the challenges facing K-Electric remain formidable. Its financial performance has deteriorated, bill recoveries are slipping, and the company has yet to adapt fully to the shift toward rooftop solar power. Corporate governance controversies have also tarnished its image.
This publication has previously examined these issues in detail, pointing to a management culture slow to respond to technological change and an ownership structure that blurred accountability.
For now, the focus returns to the boardroom. The company’s spokesperson told media persons that K-Electric has not yet received official communication from shareholders regarding the change, a reminder that even resolved disputes take time to translate into operational reality.
The broader signal
In diplomatic circles, the K-Electric agreement is being read as a test case for Pakistan’s investment diplomacy. After the fiasco of the Shanghai Electric withdrawal, Islamabad has been eager to project stability and reliability. The SIFC’s role in brokering the Saudi deal allows the government to claim a tangible success story.
But the episode also serves as a cautionary tale. The original Shanghai Electric bid was worth nearly $1.8 billion—a figure that dwarfs most foreign investments Pakistan receives annually. Losing it because of bureaucratic inertia was a costly mistake.
Now, the country has a second chance. Riyadh’s willingness to step in suggests confidence, but that confidence is conditional. The government will be expected to ensure regulatory predictability and efficient decision-making if it hopes to avoid another decade of paralysis.
For K-Electric’s employees and consumers, the headlines may not change much in the short term. Power shortages, billing disputes, and infrastructure gaps remain part of daily life in Karachi. But behind the scenes, a major shift has occurred.
The company that once symbolized Pakistan’s flirtation with global private equity is now poised to become the centerpiece of Saudi-Pakistani business cooperation. The investors who waited nearly twenty years for dividends are finally back in charge.
As one chapter closes, another begins—this time under the green and white of Pakistan and the deep green of Saudi Arabia. Whether this partnership can deliver the stability and performance that Karachi desperately needs remains to be seen.
What is certain is that the city’s electricity supplier, once again, sits at the intersection of politics, power, and profit.
