DHA City Karachi Becomes First Private Housing Project to Supply Its Own Electricity

DHA City Karachi has become Pakistan’s first privately owned housing project authorized to distribute and supply electricity within its premises.

The National Electric Power Regulatory Authority (NEPRA) has granted DHA Energy Supply Company (DESCO) two parallel licenses for electricity distribution and Supplier of Last Resort (SoLR) services for a period of 21 years.

The licenses will initially cover DHA City Karachi, located around 56 kilometers from Karachi on the M-9 Motorway in Malir district.

The decision makes DESCO the first privately owned entity to receive both distribution and SoLR licenses under NEPRA’s revised Competitive Trading Bilateral Contract Market framework. These responsibilities have traditionally been handled by former Wapda distribution companies and K-Electric.

According to its application, DHA City Karachi currently has no infrastructure directly connecting it to the national grid or K-Electric’s network.

DESCO has reached an understanding to procure 6 megawatts of electricity from Lucky Cement Limited, the nearest available source of power. The electricity will be supplied through K-Electric to residential, commercial, and other consumers within DHA City Karachi.

The Central Power Purchasing Agency, Gujranwala Electric Power Company, and K-Electric opposed DESCO’s application, raising concerns about its financial position, technical capabilities, and lack of an established operating record.

However, NEPRA rejected the objections and ruled that DESCO had presented a valid case for the licenses. The regulator clarified that the approvals would remain limited to DESCO’s facilities within DHA City Karachi.

K-Electric holds distribution and SoLR licenses for Karachi until June 2044. However, the licenses have been non-exclusive since its monopoly ended in 2023.

Under the new arrangement, DESCO will only be allowed to charge consumers tariffs, connection fees, and use-of-system charges approved by NEPRA.

Addressing concerns over the company’s financial capacity, the regulator acknowledged that DESCO was a new company that had not yet started operations. However, it noted that its parent organization, DHA Karachi, had strong financial credentials and could provide financial support when required.

NEPRA also said it is common for companies to begin with the minimum capital required by the Securities and Exchange Commission of Pakistan and increase their paid-up capital after starting operations.

The regulator said DESCO’s financial strength was expected to improve after receiving the licenses and commencing its electricity distribution and supply business.

DESCO will also be legally required to comply with all relevant technical and regulatory standards. NEPRA said a special provision covering these requirements would be included in the terms and conditions of its distribution license.