Shanghai Electric Terminates $1.77 Billion K-Electric Acquisition After Nine Years

September 11, 2025:

Shanghai Electric Power has officially abandoned its long-pending plan to acquire a 66.4% stake in K-Electric (KE), ending nearly nine years of negotiations. The $1.77 billion deal, first signed in 2016 with KES Power Limited, also included a $270 million performance-based bonus but never closed due to persistent regulatory delays, tariff disputes, and shifting policies in Pakistan.

The Chinese company’s board approved the termination on September 9, 2025, citing Pakistan’s evolving business environment and failure of counterparties to meet conditions. Shanghai Electric noted the transaction no longer aligned with its international development strategy.

The withdrawal is being seen as a setback for Pakistan’s investment climate, particularly as Islamabad seeks to deepen cooperation with Beijing. Despite repeated pledges by successive governments to resolve the hurdles, overlapping approvals and bureaucratic bottlenecks stalled progress.

K-Electric will remain under KES Power Limited’s ownership, while Shanghai Electric’s stock fell by the daily limit of 10% in Shanghai following the announcement.

Over the years, KE had improved recoveries and reduced losses, while Nepra’s tariff approval was expected to support the acquisition. However, a review petition filed by the Power Division against Nepra’s decision further complicated the process, frustrating KE’s foreign shareholders.

The collapse of the deal underscores how policy indecision and regulatory uncertainty continue to obstruct large-scale foreign investment in Pakistan’s energy sector.