New Delhi, Jan 22 Saudi and Kuwaiti investors holding a 30.7 per cent indirect stake in Karachi-based power utility K‑Electric have filed a $2 billion international arbitration claim against Pakistan, alleging regulatory interference and unpaid government dues, a report has said.
The investors also alleged prolonged blocking of a $1.77 billion sale of the country’s largest private power utility, according to a report from Profit by Pakistan Today.
The arbitration case lodged on January 16, 2026, by Steptoe International (UK) LLP and Omnia Strategy LLP, represents 32 Saudi and five Kuwaiti entities that together hold a 30.7 per cent stake in the power utility company. The investors have been cornerstone shareholders since the utility’s privatisation in 2005.
"The dispute traces back to October 2016, when the investors agreed to sell 66.4 per cent of K‑Electric to Shanghai Electric Power Company," the report said.
While regulators initially backed the transaction, the investors said the deal was stalled for over eight years amid shifting regulatory conditions.
The Pakistan administration gave contradictory government instructions and delayed mandatory national‑security approvals leading to withdrawal of Shanghai Electric.
“The arbitration filing also points to attempts by domestic investors to seize control of K-Electric through offshore structures, undisclosed ownership changes, and regulatory violations, despite repeated complaints made to regulators and enforcement agencies,” the report said.
The arbitration case also mentioned long-standing unpaid government receivables, including tariff differential subsidies owed to K-Electric for roughly two decades. The investors claimed these unpaid dues have severely impacted the utility’s cash flows, with the government imposing penalties for late payments.
The Pakistani government politicised K-Electric's multi-year tariff framework, undermining NEPRA, the power regulator, resultantly stalling the sale, investors alleged.
The investors also alleged failure of the government to notify NEPRA’s final tariff determinations issued in May 2025. The government reopened settled matters through flawed review processes, and imposed revised tariffs, costing K-Electric around Rs 85 billion annually, according to the report.
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