The Harmony of Energy
Sustainability Report 2014
K-Electric Limited Third Floor, KE House 39-B Sunset Boulevard Ext Phase II, DHA, Karachi +92 21 3263 7133 +92-21-3870 9132 ke.com.pk Contents
About the Report 03 Harmonizing Environment An Independent Assurance Statement 05 Green Management Framework 103 A Message from the CEO 07 Climate Change Policy Framework 105 Energy Conservation 107 Harmonizing Governance Climate Change Policy – Progress 109 Vision, Mission and Values 12 Lowering Emissions 111 Corporate Governance 13 Energy Efficiency Initiatives 121 Leadership Team 16 The Board of Directors Role 17 Harmonizing Stakeholder Management Compliance 21 An Engaged Business 128 Stakeholder Universe 129 Harmonizing Growth About K-Electric 26 Annexure Performance Overview 27 Management Approach 139 Generation – Re-energizing Energy 32 GRI Reference Table 141 Transmission – Progress in Reliability 37 Financial Summary 161 Distribution – Leading Progress 41 Customer Services 47 Investments for the Future 49 Redefining the Future of Transmission 53 Redefining the Future of Distribution 55 Awards & Recognition 57
Financial Value Creation Financial Sustainability 61
Harmonizing Shared Value Shared Growth – Human Resource 65 Shared Protection – Health and Safety 75 Shared Progress – Supply Chain 83
Harmonizing Shared Impact Social Impact 87 Our Sustained Impact 89 Social Investments 92 Shared Impact – Sports 99 Sustainability Report 2014
About the Report
This report celebrates our strong transparency with its stakeholders. communicating and broadcasting any performance against our environmental The report covers activities that are substantial changes in measurement and social commitments, as it is located within KE’s direct space and assumptions and analyses in its future KE's first externally audited the ones related to its community and sustainability reports. sustainability report. The purpose respective stakeholders. The report of this assessment is to provide a focuses on the organisation’s licensed The report was compiled by the ESG benchmark for comparing the network area. In this way we have and Sustainability department of KE, combination of the organisation’s limited the scope of this report to the in collaboration with Distribution, social, economic, governance, and activities of KE in the direct sense, not Generation, Transmission, Human GRI has confirmed that the report was prepared according environmental performance against including analyses of outsourced Resources, Finance, Corporate Affairs, to the GRI G3.1 Guidelines, at Application Level A+ established standards and across operations and sustainability-related HSEQ, Strategy and Marketing and time. In doing so, the report activities of the entities working on the Communications departments with communicates externally verified commercial supply and demand sides of some assistance from external K-Electric Limited (KEL) 2013-14 Sustainability Report has been prepared in accordance with the Global information on the organisation’s KE operations. We hope to expand our consultants. In compiling this report, Reporting Initiative (GRI) sustainability reporting Guidelines, version 3.1. GRI Report Services has determined performance utilizing the Global sustainability-related monitoring and the team’s goal was to satisfy the that KE’s 2013-14 Sustainability Report fulfills the requirement of GRI G3.1 application level A+. Reporting Initiative (GRI), G3.1. KE disclosure capacities to account for our disclosure standards stipulated in plans to use the results and suppliers as well by the next reporting cycle. GRI, G3.1, Level A+, as a tool for The GRI Application Level Service confirms that the required set and number of disclosures for the application level have conclusions reached in this report to both external disclosure and internal been addressed in the reporting and that the GRI content index demonstrates a valid representation of the required further improve its sustainability KE follows basic and widely used assessment for future planning. disclosures. The use of the GRI Application Level Service icon serves as the formal confirmation. performance in the future. international standards in its data Despite all the challenges that the measurement, compilation, and organisation faced in its recent past, This year, KE presents the second calculations. Moreover, the information the reforms conducted in relation to its report that ensures further assurance needed to asses our performance in management systems were such that to our stakeholders through obtaining relation to GRI, G3.1 generally require it is now able fully to report on most of Application Level 2015 a third party verification by KPMG. The straightforward measurements and the GRI, G3.1 disclosure indicators. K-Electric Limited verified report is grade checked by GRI analyses. Assumptions regarding Jul at A+ level, which is the highest measurements in this report are, We look forward to your feedback, Service disclosure level checked by the global therefore, unlikely to affect the suggestions and queries on our organisation. This report is a manifestation information provided or pose problems second sustainability reporting of KE's commitment to achieve the for future performance comparison. initiative, which can be directed to: highest levels of disclosure and KE is likewise committed to [email protected]
04 Sustainability Report 2014 Independent Assurance Report to the Board of Directors
Scope work. We conducted our work in sustainability goals and the progress Limitations aspiration, expectation, aim or material respects, in accordance with We have been engaged to perform accordance with the International made during the reporting period Our scope of work did not involve: future intention and national or the framework adopted by the company limited assurance engagement on the Standard on Assurance Engagement global socio-economic and in line with sustainability report Sustainability Report (”the Report”) of 3000 “Assurance Engagements other • Reviewed the company’s approach • Aspects of the report other than those environmental aspects guidelines of the Global Reporting K-Electric Limited (”the Company”) than Audits or Reviews of Historical to stakeholder engagement and mentioned above Initiative (GRI 3.1) and supported by for the period 01 July 2012 to 31 Financial information”. processes for determining material • Data and information on economic the company’s internally defined December 2014 prepared by the issues through interviews and review • Data and information outside the and financial performance of the procedures, as described in th GRI management of the company. The standard requires that we of associated documents defined reporting period (01 July 2012 Company, which, we are informed, are Reference Table of the report and the comply with ethical requirements to 31 December 2014) from the company’s financial records guidelines issued by the Securities and plan and perform the • Reviewed relevant documents and and Exchange Commission of Management’s assurance engagement, under systems for gathering, analyzing and • Technical information/data which Conclusion Pakistan for the period 01 July 2012 Responsibility consideration of materiality, in aggregating sustainability performance required an expert for its verification Based on our limited assurance to 31 December 2014. The company's management is order to provide our conclusion data in the reporting period engagement, nothing has come to our responsible for the preparation and with limited assurance. In a limited • The company’s statements that attention that causes us to believe that presentation of the report in assurance engagement, the • Reviewed major anomaly within the describe expression of opinion, brief the report is not fairly presented, in all accordance with the requirements of evidence gathering procedures are report as well as between the report the framework adopted by the company more limited than for a reasonable and source data/information in line with the Sustainability Reporting assurance engagement, and Guidelines of the Global Reporting therefore, less assurance is obtained • Verified the transcription of data, Initiative (GRI 3.1) and supported by the than in a reasonable assurance. internally verified by the company company’s internally defined Accordingly, the procedures selected procedures, as described in the GRI were based on our professional • Reviewed the reliability of the KPMG Taseer Hadi & Co. KPMG Taseer Hadi & Co. Reference Table of the report and judgment. Within the scope of our information, assessing related Chartered Accountants Chartered Accountants CSR Voluntary Guidelines 2013 (the work, we performed, amongst other, controls and their operation Sheikh Sultan Trust Building No. 2, Moneeza Usman Butt Guidelines) issued by Securities and the following procedures: effectiveness Beaumont Road, Karachi, 75530 Pakistan Date: 20 August, 2015, Karachi Exchange Commission of Pakistan. • Interviewed selected key senior • Reviewed the Company’s plans, Telephone +92 (21) 3568 5847 personnel of the company to policies and practices, pertaining to Fax +92 (21) 3568 5095 Auditors’ Responsibility understand the current processes their social, environmental and Internet www.kpmg.com.pk Our responsibility is to express a in place for capturing sustainability sustainable development conclusion on the report based on our performance data, the company’s
06 Sustainability Report 2014
CEO’s Message
Sustainability is not just integral to beyond their jobs to make a vital costs and protect the environment. our business. It is our business. It is difference. We actively promote this Our unrelenting commitment to our strategy. And it is our future. attitude and are proud of having so impact the social sector through our Which is why, I am especially pleased many innovators in our ranks. In turn, Social Investment Programme also to introduce our 2014 Annual we are committed to the responsibility remains a priority. This year, the Sustainability Report. It is a reflection of our employees' safety, security and number of partners has increased to of our journey to deliver a more welfare as we tirelessly work towards 13, with organisations such as Lady sustainable future, by actively engaging a future with zero-accident rates. Dufferin, Kidney Center, Karawan-e- communities, and to inspire a new Hayat and SOS Village joining the generation with the models of world Delivering affordable, sustainable ever-growing roster. We also continue class corporate citizenship. energy to customers is a priority made to support communities during evident through our commitment to calamities through relief in billing up to We have been successful in drive progress through a successful a period of six months, as we did after maintaining a streak of consecutive and responsible long-term energy the Timber Market fire incident. profits over the last few years. Our business, trusted by customers and cumulative losses are below 23.31% powering a thriving society and a We have achieved much already, but and we can proudly claim that almost healthy environment. Every day, we we know that we need to do more. On 58% of our network today is exempt make sure that the economy has the customer trust. On public from load shedding. This is a result of energy to keep running. This cannot be engagement. On openness and a decrease in electricity theft and the done without the reliability and transparency. As well as taking action successful implementation of innovations of people who are charged now, these themes will shape our innovative loss reduction initiatives. with this responsibility, and who, by commitments for the next decade and The fact that our ongoing efforts have making contributions large and small, beyond. As we build on what we have been recognized at notable enable us to play our role in shaping achieved so far, we will take another international forums — like the the energy world of tomorrow. bold step forward through the launch Financial Times and the International of a new set of sustainability Finance Corporation — is proof of the As one of Pakistan’s leading utilities, commitments looking beyond 2015 impact we are positively creating conserving energy is at the centre of that will be complemented by our across the business landscape. our business model. We continuously residential and business customer improve our electricity generation in commitments and our low-carbon Above all else, our successes are due order to lower fuel consumption and operations promise. to the hard work, passion and emissions. However, our horizon commitment of our employees. Our extends beyond our plant. We also Proving, again, that sustainability lies at people have one thing in common: they want our customers to benefit from the heart of everything we do and are specialists in their fields. Their the opportunities offered by making everything we are. identification with our company, our more efficient use of energy. With customers and our goals of innovative services, we help Muhammad Tayyab Tareen sustainable energy enables them to go households and industry to reduce CEO
08 Sustainability Report 2014
Harmonizing Governance
Teen Talwar, Clifton Sustainability Report 2014
Vision, Mission and Values Our Vision - To restore and maintain pride in KE, Hamari Manzil Karachi and Pakistan
Our Mission - Brightening lives by building the Hamara Amal capacity to deliver uninterrupted, safe and affordable power.
Our Values – We Believe Hamari Aqdaar We are committed to sustainable value creation for all key stakeholders. We believe that together we can continue to strive to enhance the organisation’s performance and create a greater economic and social impact on the community at large.
We are Trustworthy We remain accountable for all our actions. Self-accountability and the highest level of integrity are integrated in all our actions. All our initiatives are founded on compassion and honest intent. Our utmost win is to gain the trust and respect of all our key stakeholders.
We are Open We speak clearly and concisely and disseminate factual information relevant to our stakeholders. We are committed to creating open bridges of communication and to be accessible to all our key stakeholders.
We are Dependable We can be relied upon to do the right thing by everyone we come across and act in a responsible manner towards, places and the environment. We continuously strive to create sustainable impact through all our initiatives and investments.
We Think about You All our actions are with the intent to create shared value for our key stakeholders based on long lasting partnership. Mutual respect, fairness and creation of an inclusive organisational environment enhances our performance and empowers us to serve all our key stakeholders with increased commitment.
12 Sustainability Report 2014 Governance, Compliance and Risk Management
Holding Structure and Organogram Responsible and Transparent Leadership Incorporated on September 13, 1913 under the Indian Companies Act of 1882, KE was nationalized in 1952 and then K- Electric continues to advance its practice of sustainable management through responsible corporate governance. KE privatized once more on November 29, 2005. In September 2008, Abraaj Capital Limited acquired equity stake in KES believes that the more it improves its governance, the more it will need to adopt and adapt to international best practices and Power, the holding company of KE, and took administrative control of the organisation. Abraaj committed a substantial the respective voluntary codes that govern them. In addition to compliance with national and international law, KE also equity investment of USD 361 million in the organisation in a three-year period. Under the current holding structure, employs a set of ethical standards and values that guide its decision-making processes and work procedures. KES Power has a 69.2% stake in KE, the Government of Pakistan being the second largest shareholder with 24.4% while IFC & ADB own a 5% stake with minority and freely floated shares at 1.4%. Governance Framework Board of Directors (BOD) Chairman Waqar Hassan Siddique
Chief Executive Officer Muhammad Tayyab Tareen
Khalid Rafi Aziz Moolji Frederic Sicre Chaudary Khaqan Saadullah Khan Mubasher H. Sheikh Iftikhar Aziz Siddiqyi Nayyer Hussain Noor Ahmed Omar Khan Lodhi Shan A. Ashary Zafar Abbas
Board Audit Committee (BAC)
Board Audit Committee Board Finance Committee Board HR&R Committee Chairman Khalid Rafi Member Aziz Moolji Member Mubasher H. Sheikh Member Nayyer Hussain
Board Human Resource & Remuneration Committee (BHR&RC) Chairman Omar Khan Lodhi Member Shan A. Ashary Member Muhammad Tayyab Tareen
Chief Internal Auditor Chief Executive Officer Company Secretary Board Finance Committee (BFC) Chairman Shan A. Ashary Member Muhammad Tayyab Tareen Member Nayyer Hussain Member Aziz Moolji
Chief of Marketing Chief G&T Chief Financial Chief Supply Chief Business Chief Business Chief HR Chief of Chief of & Communication Officer Officer Chain Officer Development Officer Distribution Officer Officer HSEQ Security
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Leadership Team
Asif Saad Eram Hasan Dale Sinkler Syed Moonis Abdullah Alvi Muhammad Tayyab Tareen Syed Fakhar Ahmed Muhammad Shoaib Baig Chief Operating Officer Chief Supply Chain Officer Chief Generation and Chief Financial Officer Chief Executive Officer Chief Marketing and Chief People Officer Distribution Transmission Officer Communication Officer 16 Sustainability Report 2014
The Board of Directors Role
Auditing, Standards Information the employees through various organisation secretary, in respect of The Board provides oversight in the governance, management and control of System Audit and Control Association communication mediums which any contract/appointment, etc. Such (ISACA), an affiliate firm of include a confidential email address, disclosures are circulated to the the organisation and limits its role and sets its principal focus on strategic FAC International Federation of PO BOX and hotline. Employees can Board, interested directors do not direction, key policy framework, long-term business plan, setting the goals, Accountants and Global Technology directly report misconduct or any participate in voting on the said objectives and formulating policies and guidelines towards achieving those Audit Guideline (GTAG), a practice unethical practice through these resolution and it is properly goals and objectives, oversight and control, enhancing shareholders’ value guide of IPPF. mediums. Disclosure of names is recorded in the minutes of the not necessary. Board meeting and also entered in and corporate governance. • The IAD is also governed by an the statutory register maintained for IA Charter approved by the Board Employees are also encouraged to the purpose. More details are Audit Committee, which describes give suggestions and feedback on a available in the Code of Conduct. The Board is accountable to the the system of internal controls to approach to evaluate and improve the purpose, authority, responsibility specific topic or idea. Investigations shareholders for the discharge of its the Chief Executive. the effectiveness of risk management, and reporting relationship of IAD. on a specific complaint are ordered Board’s Performance fiduciary function. The management control, and governance processes. by the highest authority of the is responsible for the implementation The organisation maintains an All assurance audit activities relevant department. We Evaluation of the aforesaid goals and strategies established control framework KE’s Internal Audit Department are performed in accordance investigate all alleged breaches of The Board of Directors (Board) is in accordance with the policies and comprising of clear structures, (IAD) is independent of the activities with the risk-based Internal our code and apply appropriate fully cognizant of the importance of guidelines laid down by the BOD. The authority limits, and accountability. being audited and the Chief Internal audit plan, annually approved measures when complaints turn out its role and performance which will policy to disclose, record and address Policies and procedures are well Auditor (CIA) reports directly to the by the BAC, whereas consulting to be substantiated. ultimately decide the future of the conflict of interest is in place and details in place with a process identified Board Audit Committee (BAC) activities are based on the services company and therefore evaluates are available in the Code of Conduct. for budget allocation and review. established by the Board of Directors requested by the operating Conflict of its performance in an objective The Board establishes corporate (BOD). KE’s IA activities observe management, with agreed manner on a regular basis, Internal strategy and the company's three main external standards: objectives, scope and reporting. Interest Policy essentially based on the overall business objectives. The organisation has a policy performance of the company, and Control Process Local Code of Corporate in place ensuring that any conflict the implementation of strategic • AZM Speakup – The Board is ultimately responsible KE treats internal auditing (IA) Governance issued by the SECP of interest should be properly policies and business plans and for system of internal control and as an autonomous, objective Whistle Blower Policy disclosed, recorded and addressed, achievement of budget targets and for reviewing its effectiveness. The assurance and consulting activity • The IIA’s (Institute of Internal We value an open dialog on integrity upholding the interest of the key performance indicators. The Board, whilst maintaining its overall designed to add value and improve Auditors) International Professional and responsibility in our actions with company. In line with the provisions Board recognizes its fundamental responsibility for managing risk its operations. It nudges the Practices Framework (IPPF) and our employees. A direct of Companies Ordinance 1984, responsibility to safeguarding and within the company, has delegated organisation closer to its objectives the International Standards for the communication bridge has been every director requires to disclose enhancing shareholders’ value and the detailed design and operation of by bringing a systematic, disciplined Professional Practice of Internal created between the leadership and his interest in writing to the stewardship of company’s assets
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and sets its principal focus on controls and improves operational every stakeholder including investments initiatives that satisfy shareholders' queries are answered of the organisation irrespective of strategic direction, key policy and financial performance of the shareholders, employees, ambitious corporate citizenship to improve communication and amount invested and keeps them framework, long-term business company. The CEO sets his main financiers, creditors, business goals. There is discussion around understanding to make informed posted and updated on the company’s plan, oversight, control and adoption focus on implementing long-term partners, local communities and forming an ESG Committee investment decisions. Any material affairs. Any issue or grievance is of best practices of good corporate business plan of the company and others. The organisation encourages recognizing a growing opportunity to development in the form of signing promptly addressed. In addition governance. The Board also to add value to shareholders’ active participation of shareholders further broaden KE’s social of a major agreement and others to conventional means, the continuously reviews developments investment under the strategic in all general meetings of the investment programmes to support are immediately announced for the organisation uploads on its website, in corporate governance in order to direction and policies approved by organisation and values their views organisation operational goals and information of shareholders through under Investor Relations section, ensure that the company remains Board. The Board sets key towards better governance and stronger stakeholder engagement. online systems at stock exchanges substantial information relating to aligned with best practices of good operational and financial objectives operational management. The and SECP and through press the company’s operational and corporate governance. at the time of approval of the annual organisation is also cognizant of its Investors Relations release/notifications. The organisation financial data to facilitate investors. budget of the company. legal and constructive obligations maintains a comprehensive website Contact information of the KE CEO’s Performance towards its business partners, local and Engagement showcasing all organisation related representative and related links A comprehensive CEO’s performance communities where it operates and Present and prospective investors information with a specific link/section of SECP and Pakistan Stock Review by the Board review is undertaken by the Board other stakeholders, and takes are informed about the company’s “Investor Relations” containing all Exchange are also available on Chief Executive Officer (CEO) is every year at the time of review and appropriate actions to timely respond activities, key operational and financial and other data which helps KE’s website to help investors appointed, on Board Human approval of company’s annual to their expectations after taking into financial indicators and future make investment decisions. lodge their complaints or post their Resource & Remuneration audited financial statements against account a pragmatic view of their plans of the organisation through queries. Delivery strategy and Committee (BHR&RC)’s pre-set strategic, operational and interests associated with the company. quarterly and annual reports. Grievance Handling redresser mechanism are properly recommendation, by the Board of financial goals and effective Moreover, in the shareholders developed and vigilantly monitored Directors (Board) of the company implementation of strategic decisions meeting (AGM and EGM) the Mechanism for immediate resolution of for a three-year term. The CEO is and policies of the Board. ESG Issues members are given detailed updates KE recognizes the importance of investors’ grievances. responsible for the management ESG related issues are regularly on the company’s affairs and present and prospective investors of the affairs of the company and discussed at the BOD in order to ensures smooth functioning of the Recognition of ensure legal compliance around business with optimum utilisation Stakeholders‘ Rights ethical issues, oversee the of the company’s resources and The organisation recognizes and company’s contributions to promoting effective implementation of internal respects the rights of each and public welfare, and guide social
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Compliance
Top Regulatory Bodies implemented for all identified Policy for Safety of Registered in Pakistan Stock Exchange, KE abides by a number of codes KE, being an Organisation registered operational and financial risks, the organisation is working on a holistic Records of the Company under Companies Ordinance 1984 The preservation period for various including, the Code of Corporate Governance, Companies Ordinance 1984, Business Continuity Plan (BCP). Listing Regulations of Stock Exchanges, Memorandum & Articles of (the ordinance) and listed at documents stipulated in Annex-K Pakistan Stock Exchange of the of Companies (Registration Offices) Associations of the organisation and other statutory requirements and country, abides primarily by the Disaster Regulations 2003 is used as a yard applicable accounting frameworks. ordinance in addition to the Code Management Plan stick, however the documents are of Corporate Governance (CCG) The disaster management plan is preserved for a much longer period and listing regulations of the stock categorised into the following three in an orderly & systematic manner In compliance with the Code of Ordinance 1984 adhering to • The statement of compliance exchanges. As part of the regulatory types of response elements as the and a computerized database is Corporate Governance, among International Financial with the best practices of regime, KE reports to the apex initial part of the BCP project: maintained for each category other things, KE has ensured that: Reporting Standards corporate governance is reviewed corporate regulatory body of the of documents separately and the and certified by statutory auditors country, Securities & Exchange Operational Response - record is subject to periodic • It has effective representation • Proper books of accounts have before publication Commission of Pakistan (SECP) To get the disruption under control checks by internal & external of independent and non-executive been prepared and maintained in addition to Pakistan Stock as quickly as possible so that auditors. KE places due emphasis directors on its Boards of with estimates based on • There is implementation and Exchange. Whereas, KE being the normal operation is resumed. for confidentiality and safe custody Directors so that the Board reasonable and prudent judgment monitoring of an effective system only vertically integrated utility of its financial records. Access as a group includes relevant of internal controls involved in generation, transmission Management Response - to electronic documentation core competencies • It has published and circulated and distribution and possessing To allocate resources and make has been ensured through a statement along with its annual • Strategic plans and decisions business licenses for each critical decisions needed to resolve implementation of a comprehensive • All financial statements are reports to set out the status of its have been covered adequately respective area, is also regulated by the situation. password protected authorisation prepared in conformity with compliance with the best practices in the Director’s Report National Electric Power Regulatory matrix in SAP-ERP system. the provisions of the Companies of corporate governance Authority (NEPRA) for power Communication Response - generation, transmission, To communicate with employees, Documents are classified distribution and tariff-related issues. their families, officials, customers, on the basis of their valuation and other agencies and media. importance and valuable original Risk Management and property title documents, key Business Continuity Plan We have in place disaster agreements, incorporation The Board of Directors and the management plans for all our documents and others are prioritized management periodically reviews critical business operations for safe custody purpose, fireproof major financial and operating risks like IT, distribution, transmission, storage for such documents has faced by the business. Although finance and generation. also been arranged. mitigation strategies are
22 Sustainability Report 2014
Harmonizing Growth
Jinnah's Mausoleum Sustainability Report 2014
About K-Electric
K-Electric (formerly KESC), Power Plants incorporated in 1913, is a publicly listed fully integrated power utility involved in generation, transmission 88 MW and distribution, energizing KARACHI, the 4th largest Korangi Gas Turbine Power Station metropolitan of the world for more than a century. Twenty eight Integrated Business Centers (IBCs) 88 MW are located across Karachi. The SITE Gas Turbine Power Station organisation employs over 10,000 workers in different capacities; in doing so it provides direct income to almost 10,000 households. 220 MW Combined Cycle Power Plant Transmission KE has 64 Grid Stations and 128 power transformers in service with 1248.8 KM 1260 MW of overhead and underground cables. Bin Qasim Power Station – I
Generation Available capacity 1635 MW 560 MW (June 30, 2014 Fuel Types: Gas, HFO) Bin Qasim Power Station – II
26 Sustainability Report 2014
Performance Overview
Financial Performance Operational Performance
Net income in FY 2012 was Generation capacity Marked improvement: FY Average fleet efficiency positive for the first time in Total CAPEX spend of enhanced by nearly 1,010 MW, 12-13 EBITDA of PKR 26.9 increased from 30.4% to Cumulative T&D losses 17 years – last fourteen over USD 1 billion through addition of four new billion; FY13-14 EBITDA of 37.0% (FY-08 vs FY-14). are down to 23.31%. consecutive quarters have over last 5 years. power plants. approx. PKR 30.2 billion. had a net profit.
Circular debt managed by a IFC/ADB converted USD 50 Conversion of three existing Zero load shedding for set-off mechanism with GOP million (USD 25 million each) open cycle plants to combined Successful relaunch from 70% of the city has customers representing payables – subsidy receivable of long-term loan into equity in cycle adding 47.5 MW of KESC to KE distribution losses of 16%. 58% of overall energy is netted with NTDC payable December 2012– validating the capacity as well as enhanced distributed. or cash paid to KE. investment case and success generation efficiency. of the turnaround strategy.
Successful launch of AZM Sukuk SCADA, SAP IS-U and Smart grid project AZM TFC (Fully subscribed (Fully subscribed in ERP – implemented across in progress. in 6 weeks) 12 business hours) the company.
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Human Resource Stakeholder Management
KE undertook the largest Succession planning, focus Real time interactive Several sovereign issues Realignment of workforce cultural change management on training and skill social media presence around implementation Open, proactive, through restructuring programme in the corporate enhancement and induction through Twitter, Facebook agreement, tariff structure accessible and transparent across the board from history of the country. Some of fresh blood through one and LinkedIn, which and fuel supply significantly relationship with media. 17,436 to 10,603 employees. 11,500 employees went through of the biggest management became a first in the utility addressed. the training programme. trainee programme. sector in Pakistan.
Social Investments
Successful completion An extensive career of the fifth round of the Social investments in the Over 3,000 hours have been progression programme Our cumulative social annual performance health, education and sports volunteered over the last two has been conducted; 1,046 contributions impact over 7.5 appraisal through Bell Curve through grassroot sports years, which brings the total employees have been trained million individuals in the city. evaluation system for development sector. so far, up to 153,000 hours. management and staff. and promoted.
30 Sustainability Report 2014 Generation – Re-energizing Energy
Today our Total Gross Dependable Capacity is 1,620 MW with nearly 1,000 MW of plants less than five years old.
We are consistently innovating, Asian Power magazine. The addition enhancing capacity and efficiency at of BQPS II, the largest and most our generation plants. Over the last efficient combined cycle plant in five years we have enhanced installed Pakistan, has taken KE one step generation capacity by over 1,010 MW closer to self-reliance in power and fleet efficiency has increased generation and in meeting from 30.9% in Sep. 2008 to the Karachi’s long-term power needs. highest ever 40.3% in Feb. 2014. The accomplishment is a landmark achievement in the energy sector Our fleet portfolio has been and with the addition of enhanced through rehabilitation state-of-the-art 560MW Combined of old plants and addition of new Cycle; KE can proudly claim that plants. Total Gross Dependable the Bin Qasim Power Complex Capacity of 1,620 MW with nearly stands as the country’s largest, with 1,000 MW of plants less than five an installed capacity of 1820 MW. years old (Gross Capacity lesser compared to FY 13 as it does not In the last fourteen months, reliability include units for coal conversion projects were implemented through and obsolete units of KTPS, an extension of contractual service SGTPS and KGTPS). agreement with GE worth USD 11.2 million for LM6000 GT’s (CCPP). Our 1260 MW Bin Qasim Power Rehabilitation of BQPS-I for capacity station 1 (BQPS1) has gone through and efficiency recovery has been major rehabilitation in the last five undertaken as a USD 46 million years resulting in the recovery of 40 project which would result in 86MW MW and improvement in efficiency. increase in capacity and 2.2% efficiency Addition of 220 megawatts was improvement. made possible through successful implementation of the Korangi All KE generating stations CCPP. Conversion project for are certified in the field of two open cycle Gas Turbines into QHSE. They are certified with combined cycle, is in progress. OHSAS 18001 for excellence in Upon completion all gas turbines complying with international would run in combined cycle mode. safety standards, ISO 14001:2004 for compliance with international 90MW GE Jenbacher Site and standards of Environmental 90MW GE Jenbacher Korangi were Management and ISO 9001: 2008 termed the ‘Best fast track project’ for excellence in Quality and ‘Best Plant in the Region’ by Management Systems.
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Generation Capacity and Efficiency Enhancement Ongoing Efficiency underway. This will result in in September 2014. Design, Generation capacity has been enhanced by 1010MW and overall efficiency has improved by 18.6% (Jan-Jun ‘14 additional capacity of 47.5 MW procurement and construction in vs Jan-Jun ’8). New projects for adding 47MW capacity are under various stages of construction/commissioning. Enhancement Projects (27.5 MW by Sep 2014 and 20 MW progress for the NTP to Korangi Increase in efficiency and capacity by Jul-Aug 2015) and an increase in (10 MW) project issued in Dec 2013 and will be achieved from converting fleet efficiency. the NTP to Site (10 MW) project issued Gross Dependable Capacity (MW) two existing fully operational open New Installed Capacity 1010MW Capacity on 26th Feb 14. A five-year rehabilitation New Capacity Already Added & Efficiency cycle plants (220 MW and 180 MW EPC activities at KCCPP 220 MW plan for BQPS-Units 1, 2, 5 & 6 has been Recovery at • 220MW CCPP Korangi BQPS-I GE JB) to combined cycle. Advanced plant for the addition of 27.5 MW are approved by the management and is in 59% • 180MW GEJB Korangi & SITE ongoing construction activities for in the constructional/commissioning place (Expected increase in capacity KCCPP 2,183 conversion to combined cycle are stage and are expected to complete • 50MW Aggreko BQPS-II S&K 86 MW; efficiency 2.2%). Completion 86 (Rental/Rehab of Old Plant) 2,097 GLIP 2,077 20 • 560MW BQPS 2 Closing 27 Cycle 1,524 2,050 Closing 1,376 Cycle Capacity Addition in 14 Months 49% 344 895 New New • 47MW CSK Projects 1180 1155 2050 2077 2097 • 86MW GLIP at BQPS-1 Existing Existing Existing Existing Existing
Sep-08 Mar-12 May-12 Sep-14 FY-16 upto-Yr 18
CCPP Aggreko Aggreko GE JB GE JB CCPP GE JB GE JB KTPS Aggreko BQPSII BQPSII 25 MW 97 MW 25 MW CCPP 97 MW 60 MW 30 MW 26 MW 45 MW 45 MW U4 decom decomm Open Cycle Combined Cycle -85 MW -50 MW 375 MW 185 MW
Jan-09 Mar-09 Jul-09 Aug-09 Sep-09 Oct-09 Dec-09 Jul-10 Mar-11 Jan-12 April-May-12
1010 MW Added to Date
Improvement in Fleet Efficiency 18.6% • 18.6% Efficiency Gain (Jan-Jun 08 to Jan-Jun 14) • Addition of new efficient plants. • Annual maintenance of BQPS.
• Efficiency increased by 10.1% from Jan-Jun 08 with the addition of GEJB (S&K) and 220MW CCPP in Jan-Jun 2010.
• Efficiency increased by a further 12% due to
continuous operation of BQPS-2 in Jan-Jun 13. 10.7 30.4 33.8 33.5 35.59 37.87 35.41
• Efficiency decrease in Jan-Jun 14 due to LPT rotor failure at BQPS-II (Under Warranty) will revert upon new rotor replacement. Jan-Jun ‘08 Jan-Jun ‘09 Jan-Jun ‘10 Jan-Jun ‘11 Jan-Jun ‘12 Jan-Jun ‘13 Jan-Jun ‘14
34 Sustainability Report 2014
Key Generation Statistics
Installed Capacity: 2341MW (This includes 125MW capacity of an old generating unit which KE has de-commissioned because the unit is obsolete, unreliable & unsafe to operate and has a 01 very low operating efficiency (application for de-comissioning pending with NEPRA)
Fuel types at KE plants: 02 Gas, HFO
About 45% of the electricity is purchased 03 from WAPDA & IPPs
Nearly 55% of the electricity is generated 04 through our own system
The KE fleet has 2341 MW of installed capacity to cater to the city’s 05 requirement. The main generation units consist of:
Bin Qasim Power Station I (1260MW Steam Power Station). It is a thermal power station comprising of six steam turbine units of 210MW each. Each of the units 06 can be fired on Gas or HFO.
Korangi Power Complex (Comprising of 125MW old Steam Power Plant and 220MW Combined Cycle Power Plant). KE has applied for the de-commissioning of the 125MW 07 steam turbine due to its poor efficiency and obsolescence.
GE-JB Gas Engine Power Stations at S.I.T.E. and Korangi (88MW each). Each of these stations comprises of 32 High efficiency GE-Jenbacher gas fired engines 08 of 2.739MW each.
The new state-of-the-art, Bin Qasim II 560 MW 09 Combined Cycle Power Plant.
KE also imports power from independent power producers, 10 captive power plants and NTDC to offset the deficit in supply.
36 Sustainability Report 2014
Transmission - Progress in Reliability
KE’s transmission system comprises a total of 1,249 kilometers of 220 KV, 132 KV and 66 KV transmission lines with 63 grid stations. With initiatives taken to improve system reliability, our net transmission losses are currently residing at less than 1.27%. Rehabilitation of our EHT network has resulted in 189 kilometers of EHT lines rehabilitated. With an addition of 62 km of EHT lines added, our power transformer reliability has increased with a reduction in transformer tripping by almost 55%. Our fault response time has improved, with 56% reduction in unserved energy since 2008. · Increased transmission lines reliability · 41% reduction in lines tripping since 2008 · Theft reduced by almost 100% · Improved fault response · 43% reduction in unserved energy since 2008
Addition of a mobile grid at Gharo: 15/20 MVA in FY 13-14 has resulted in a net addition transmission capacity of 706 MVA. In total 11 new grid stations have been added since 2008.
The state-of-the-art SCADA has gone through ongoing improvement over the years. We have also introduced smart transducers at 220KV line and transformer bays for visualizing three phase voltage, current, active power and reactive power in load dispatch center. Optimized data storage capability has been introduced by reconfiguring SCADA system to store real-time values periodically.
Successful implementation of SAP PS Module in Transmission is in progress with more than 50% of grid assets uploaded to the SAP database and uploading of all 132 KV and 220 KV in process with KCR 220 KV already gone live. APM through SAP has been started and was executed successfully for grid transformers in FY2013-14. Fire alarm systems have been installed at 19 grid stations. 63 1,249 KM 220, 132 & 66 KV Grid Stations of Transmission System Transmission Lines
38 Sustainability Report 2014
Power Transformers Trafo Trips (No.) Actual Trips Distribution Un-served Energy by Trafos (MWH) 341 255 278 170 129 181 153 11,233 3,700 3,924 2,881 4,488 5,498 4,992 Reliability
55% Reduction in transformer 198 158 161 168 tripping vs. 2008. 85 59 53 70% Transformer trips occurred by 143 137 117 84 76 113 94 11KV (Distribution network) from Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun 2008 2009 2010 2011 2012 2013 2014 Jan-Jun ‘08 Jan-Jun ‘09 Jan-Jun ‘10 Jan-Jun ‘11 Jan-Jun ‘12 Jan-Jun ‘13 Jan-Jun ‘14 Jan-Jun 08) to Jan-Jun 14
Fault response improvement, 56% Transmission Network - Key Initiatives reduction in unserved energy vs. 2008. Un-served energy by Trafos (MWH) Increased reliability in transmission network and major reduction in transmission losses since 2008.
11,233 3,700 3,924 2,881 4,488 5,498 4,992 4.50 4.19 2.7% Reduction in transmission losses 4.00 3.25 3.05 2.7% reduction in transmission losses. 3.50 2.93 3.00 189km old EHT lines rehabilitated. 3.00 Additional 62km EHT lines added. 2.44 2.36 2.27 2.22 2.50 2.02 1.91 1.83 1.77 1.63 1.57 2.00 1.51 1.37 1.47 Jan-Jun ‘08 Jan-Jun ‘09 Jan-Jun ‘10 Jan-Jun ‘11 Jan-Jun ‘12 Jan-Jun ‘13 Jan-Jun ‘14 1.3 1.36 1.28 1.26 1.50 1.03 1.13
1.00
0.50
0.00
Trafo trips (No.) Transient Actual Theft Dec‘10 Jun ‘11 Jun ‘12 Jun ‘10 Jun ‘13 Jun ‘14 Sep ‘11 Sep ‘12 Dec ‘11 Dec Sep ‘10 Sep ‘13 Dec ‘12 Dec Jun ‘09Jun Dec ‘13 Dec Mar ‘11 Mar ‘12 Sep ‘09 Sep ‘08 Mar ‘10 Mar ‘13 Mar ‘14 Dec ‘09 Dec Dec ‘08 Dec Mar ‘09 Transmission Lines 267 228 246 230 186 193 158 10 Reliability 20 19 17 93 3 85 23 Ongoing Strategic Transmission Projects 51 83 56 0 44% Reduction in lines 32 In the year 2013-14 KE enhanced transmission capability by 97 MVA by converting transformers from 82 tripping vs., 2008. ONAN to ONAF through installation of fans with auto control system. KE also signed a joint venture with AKHMCF
164 128 141 130 81 134 126 (Agha Khan Hospital and Medical College Foundation) on 1st Feb 2013 for 132 kV Agha khan Grid station along 100% Reduction in Thefts vs., 2008 with allied 132 kV underground cable circuits. Grid energisation is expected by mid March’15. Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun (100% vs., 2012). 2008 2009 2010 2011 2012 2013 2014 In KGTPS-II Generation Expansion Project, new 132 kV GIS (14 bays) has been signed-off in October 2013. Commissioning Fault response improvement; 43% is scheduled on 12-June 15. Moreover in SGTPS-II Generation Expansion Project, 04 additional 132 kV GIS bays have been reduction in unserved energy vs., 2008. included for safe evacuation of ST Load. NTP has been issued on 26th Feb 2014. Design completed, erection and installation work at SGTPS-II will start soon. Planed commissioning of SGTPS-II is in Aug-Sept 2015.
40 Sustainability Report 2014 Distribution – Leading Progress
While lighting up around 2.5 million ongoing project. The company households, industries and is consistently adding capacity commercial ventures, continues to to the distribution system along bring challenges for us, some very with preventive maintenance evident ones include the law and projects conducted on Low Tension order situation, growing demand, and High Tension networks. A total prolonged summers and increase of 229MWs were added to the in electricity tariffs. Despite these distribution system through new hurdles we continue to make connections in FY14. progress. Today we can proudly State-of-the-art billing and CRM claim that 58% of Karachi is exempt system roll out (SAP IS-U) in all from load shedding, in other words IBC’s resulted in improved systems, gets 24/7 electricity including better overall management and all industrial zones and pockets increase in productivity. of underprivileged areas. Our transmission and distribution Sustained Loss losses reduced by 11.1% over the last five years, standing today at Reduction Initiatives 23.8%. Over 70% of Karachi has With increased capability to target distribution losses of 16%. Two smaller clusters for loss reduction thirds of KE’s distribution network and increased stakeholder support that is 17 out of 28 IBC contributes and accountability, we have been over 80% of revenue with a recovery able to get sustained loss reduction ratio of 95% without PSC. and operational excellence through the following strategic initiatives System improvement and upkeep of focused on under privileged areas the distribution network is an and the masses:
42 Sustainability Report 2014
Aerial Bundle Cabling (ABC)
To date ABC has benefited approximately 180,000 consumers and as a result proved to be one of the most effective solutions for theft reduction as putting a hook connection is more difficult and now much easier to detect.
It also proves to be safer for communities and the environment and as a result of reduction in losses the high loss areas would eventually get minimal or no load shedding. It also adds to the aesthetic of the specific area as it is less cluttered and gives a cleaner impact.
Aerial Bundled Cabling (ABC) resistance to moisture and surge continues as a means towards currents. It allows prevention of fatal sustained loss reduction in areas accidents and minimizes tripping infested with illegal consumption of which is a norm for high-loss areas. electricity despite various external Going forward, the company plans challenges and at times violent to convert PMTs in high-loss areas resistance from illegal electricity to ABC to yield benefits for both the consumers. ABC has been utility and the end consumer. successfully rolled out on 226 Pole Mounted Transformers (PMTs) Low Cost Meter namely in areas of Clifton (Kemari), Defence (Gizri), Gulshan, Garden, Project North Nazimabad, Bahadurabad Low-cost meters have been (Lines Area), Johar and other areas provided to consumers residing of the city where losses have been in underprivileged communities significantly reduced on these PMTs. on easy installments. These communities were infested with It provides relative immunity against illegal connections or ‘Kundas’ short circuits caused by external and therefore this gives the forces (wind, fallen branches) hence company an opportunity to give minimizing the voltage fluctuations legal connections to many slums and breakage of wires while with very high losses. enhancing the useful life of PMTs. There has been substantial decrease The drive involves community in faults reported due to higher engagement and support and
44 Sustainability Report 2014
thus an opportunity for each software and transmitted via GPRS. losses. The non-technical losses of power factors of each and every optimizes HT: LT ratio community to get better service The chances of human error have also called commercial losses, consumer. Therefore, we have from KE and to use electricity decreased, resulting in lower caused by actions external to the circulated forms among ordinary (initially to 1:2 against through a legal metered connection. complaints and better consumer power system, are due to power consumers as part of their self-load a standard of 1:1.2). in Going forward we plan to install satisfaction. It also improves the theft, non-payment of customers regularisation scheme, whereby a layman’s term it is some 100,000 meters under this accountability of meter readers as and energy accounting system. consumers are notified to rectify availability of more project in the year FY1 15-16. pictures are required for each meter Technical losses occur naturally their power factors themselves, along with GPS tracking of the and are due to power dissipation thus enabling KE to improve its power for distribution Flexible Payment individual. The mobile application in transmission and distribution distribution and plan its network in hence a decrease also has a feature where Meter power lines, transformers and an efficient manner. in load shed. Facility Readers can take pictures of measurement devices. While Consumer’s propensity to pay has discrepancies they note on their curtailment of non-technical losses 15 feeders executed (FY14) with Preventive and considerably decreased over the route, which enables the company is catered to in all utilities, little technical loss reduction from 14% to years following tariff increases and to deal with electricity theft with heed is paid to the curtailment of 7%. Around 100 feeders targeted Corrective Maintenance as a result many good consumers timely proof. It is our first step technical losses due to difficulties within 2015. With an aim for continuous reach the verge of non-payment. to move towards a paperless, in exact loss determination and improvement in our network and to There are many customers who are with the intent of reducing errors green environment. performance management. ensure sustainable energy willing to pay but their income levels due to human intervention. The major impact of supply for our consumers, we do not allow them to clear the dues An android application has been With this project we tend to focus the project is reduction initiated a formal programme of on time. Hence with this realisation, developed that enables meter mainly on the development of in feeder technical loss Preventive Maintenance on both the company has offered flexible readers to go on the field and note efficient mechanisms for significant by 50% of the current High Tension (HT) and Low Tension payment options. Discounts and down meter readings from the reduction in technical losses at the loss level, reduction in (LT) networks. This programme was rebate are offered on full settlement meters on their route. The readings feeder level through standardized initiated with an aim to improve and easy installments are also are then transferred to billing network optimisation. As a result faults and tripping, system reliability by minimizing offered to provide the customer with servers via GPRS and then of which, not only the technical loss hence improvement in outages due to faults and system an option for partial payment. processed for billing. Currently of the company shall reduce but power quality and downtime and increased energy Rebate of upto 50% are offered to 18 out of the 28 business centers improved service levels and supply through reduction in feeder underprivileged consumers who of KE have adopted this technology reduction in network faults will power factor (PF 0.9). tripping. This in turn also decreases are willing to pay. with more to follow in the current The implementation our cost of corrective maintenance Efficiency also be witnessed. year. A total of 366 meter readers are of the project also /replacement of damages and Mobile taking readings on android phones. Enhancement Projects Another aspect of reducing improves voltage within reduced accidents through Network Optimisation Project controlling equipment failure. technical loss is the identification the limit of +/- 5% and Metering Project Mobile Meter reading reduces time The total losses in transmission and The objective of the project is to to process billing as the readings distribution systems consist of eliminate manual meter reading are now punched directly on the technical losses and non-technical
46 Sustainability Report 2014 Customer Services – Towards a Customer Centric Organisation
IBC friendlier. Induction of Customer SAP CRM & ISU used by KE to help gets a refresher of the amazing SAP Relationship Officers at IBCs is our CCRs better serve our that they use to interact with our another manifesto strengthening our extremely large base of customers 233,410 customers in 2014. customer eccentricity and commitment. is now more effective than ever. The KE believes in upholding our four-day CRM mandatory training Our CS staff feels pumped up after tradition of serving senior citizens and conducted last year for all Customer the rigorous trainings and feels that special visitors with a priority Services staff was to ensure that KE is looking well after their growth Customers now do not have to service as an acknowledgement the SAP is continued to be brought and development as they have invested of their status in our society. The in best use and that our CS staff 2,016 man-hours in their learning. wait for the bill to be delivered to their doorsteps in order to make the monthly payment and can Total Customer Interaction via 118 Call Centre 2014 easily avail this facility through a 160000
single step registration process. 140000
120000
100000
Our objective is to make access easy task. Now KE customers can shutdowns, faults and load shedding 80000 for the customer to K-Electric easier make payments through online or schedule, etc. Customers also have 60000 and simpler. To achieve this we are mobile payment options. access to monthly billing details. making processes simpler, 40000 empowering the customer services In order to provide more real time In order to make the customer 20000
team and creating more efficient feedback to the customer, SAP has experience more customized and 0 platforms and alternate channels been integrated with the system to virtual, a self care portal is in the PSC SIMZ Malir KIMZ Uthal Baldia
for the customers to engage with us. allow for better data management development stages which aims to Gadap Clifton Landhi Jauhar Surjani Saddar Liyari-I Liyari-I Garden Korangi Defence Orangi-I Orangi-I Gulshan F.B. Area F.B. Bin Qasim Bin and improved communication with empower the customer through Undefined Liaqatabad Tipu SultanTipu Nazimabad Shah Faisal Shah Bahadurabad N. Nazimabad In order to meet the growing needs other related business units. proactive information, quick access North Karachi of the customer and to reduce the Customer service is now also and online payment platforms. turnaround time, we have expanded empowered to handle complaints our state-of-the-art call center and from alternate channels such as Total Customer Interaction via Customer Visits to IBC 2014
streamlined call handling email, social media, website and Building Customer 25000 capabilities through increased SMS. All customer platforms are Relationships at IBCs number of PRI lines, construction of also empowered with CRM services. For more complex billing related 20000 an ISO compliant server room, and Auto complaint rectification issues or more personalized increase in the number of customer confirmation via IVR to services, the customers visit us at 15000 service representatives. Customers all customers is being implemented. our IBCs or Integrated Business now do not have to wait for the bill to Centers where they can discuss their 10000 be delivered to their doorsteps in A very powerful platform of issues face-to-face with our trained order to make the monthly payment SMS complaint registration was CCRs over the counters. 5000 and can easily avail this facility through a launched this year in order to make single step registration process. complaint registration and feedback Even at IBC level we are not ignorant But that is not where it ends. Standing more effective. This service is also 0 of how customer focused we need to in long queues outside bank branches used to inform customers SIMZ be and have rolled out new concepts KIMZ Baldia Gadap Clifton Saddar Liyari-I
under the scorching sun to make the proactively of the major Korangi Orangi-I F.B. Area F.B.
to make our customer’s visit to the Qasim Bin Undefined Liaqatabad Tipu SultanTipu Nazimabad bill payments is definitely not an developments with regards to Faisal Shah North Karachi
48 Sustainability Report 2014 Investments for the Future – Imagining the Unimaginable Coal Based Projects
KE’s turnaround and our innovative approach have created higher benchmarks for the sector to follow. The thought 420 MW Coal Conversion Project Country-wide Impact of back within five months of the project leadership created by KE is our contribution to the overall development of the energy sector in Pakistan, especially the KE is looking to pioneer the Cost Savings and GHG Emissions completion. An additional advantage innovative investments made to strengthen and build efficiencies in generation, transmission and distribution. development of coal power in the Calculation of country-wide impact of using coal would be the availability country and, as a first step, it is for existing operations and for the of substantial quantities of ash that KE is investing in strategic projects for the future to create value for our shareholders and community, with focus on working on the conversion of two project shows that the estimated would be recycled. energy infrastructure and smart grid solutions. furnace oil based units out of six units cost would be around US$ 231 million (210 MW X 2) of its 1200 MW Bin Qasim to convert two units with a total Transportation of Coal Our Strategic Goal and Renewable Energy Investments Power Station 1 (BQPS-1) to coal in capacity of 420 MW and will result in Coal will be transported by sea. It is Phase 1. This project is being developed improvement of the efficiency of the considered to be transferred to 8000t KE has taken a lead role in Our primary emphasis is on coal that we will convert 15% of our under an Independent Power Producer power generation units. Assuming barge in Qasim Port area from large redefining the future fuel strategy as the fuel of the future for Pakistan. generation portfolio through (IPP) structure. KE will lease out the the delivered fuel price of US$745/ton capacity coal ship and then transferred of the energy sector of Pakistan. Thar has one of the largest renewable energy sources by 2020. two units to the IPP which have already and imported coal price of US$125/ton, to the special port of the plant. The From solar, biogas to coal we are reservoirs of lignite coal available been formed by the project investors the country will realize annual savings waterway between Arabian Sea and exploring and investing in fuel in the world. Current estimates The following gives a snapshot of by the name of K-Energy. of about US$505 million, resulting in Qasim Port area is Phitti Creek, about options that are reliable, affordable suggest close to 175 billion tons our strategic investments for coal a payback period of only five months. 35km long. The plant will be provided and have low carbon impact. of recoverable reserves. Other than and renewable energy: K-Energy has entered into an EPC with supporting facilities, such as special contract with a reputable Chinese Conversion of two units to coal firing coal unloading terminal for 8000t barge contractor, Harbin Electric International at Bin Qasim Power Station will increase and corresponding unloading (HEI) for the engineering, procurement, the CO2 emissions by about 184,686t machineries. and construction of new machinery, CO2e annually, nearly 6% increase which will also include overhauling and from the baseline. The table below A new coal unloading terminal for rehabilitation of existing equipment. The presents the calculation of annual fuel 8000t berth is proposed to be built for boiler being designed is based on coal consumptions and GHG emission this project, having length of 200m and specifications suitable to local coal to reductions from the project. width of 25m, with the turning basin and accommodate Thar coal as and when anchorage area size considered as available in sufficient and commercial With improvement in the thermal per the designed type of ship; 2 sets quantities. Coal for the operations of efficiency of the plant by 3% and the of unloading machineries shall be the plant initially will be procured from benefit of lower coal price when installed at the unloading berth, each a dedicated mine in Indonesia. K-Energy, compared with fuel oil, the conversion set has an unloading capacity of 1250t/h, vides HEI, shall be responsible for project generates significant savings whose annual unloading capacity can construction of the boiler, auxiliaries over the life of the plant and meet demand of coal consumption and coal handling infrastructure. investment is estimated to be paid of the power plant.
KE will lease out its existing equipment Existing Units Project consisting of steam turbine and the Balance of Plant (BOP) to K-Energy for Dependable Capacity (MW) 320 420 the life of the project. KE has gotten approval from NEPRA to have its Availability (%) 85 90 license modified in April 2014. Efficiency (%) 29.0 32.0
The total cost of the project is Electricity Generated (GWh/yr) 2,383 3,311 $ 400 million. With a 32-month construction time, the project is Energy Consumed (GWh/yr) 8,216 10,348 expected to come online by first CO2 Emission Factor (tCO2/TJ) 77.4 101.0 quarter 2018. CO2 Emission (tCO2/TJ) 2,289,383 3,762,442
50 Sustainability Report 2014
660MW Coal Fired at Port Qasim purchase by KE from the facility. K-Electric has identified an opportunity Solar Initiatives KE has initiated development of a The power sale proposal has been to develop a waste-to-energy power area. Land options are being with the panel of experts. EPC is greenfield 660 MW coal fired power provided to KE by SNPC. project within the vicinity of Karachi by shortlisted at the moment. currently being finalized for both the plant in the strategic location of Port SNPC has initiated communication utilizing the municipal waste deposited In an effort to add nearly projects. KE has shown its interest to Qasim. China Machinery Engineering with STDC (Sindh Transmission and in landfill sites. The waste to energy 50-100 MW of solar power First Solar, USA participate in equity subject to policy Corporation (CMEC), China Dating Distribution Company) regarding the project has a huge social impact as into its system, KE First Solar and KE have signed decision on wheeling the power to KE. Overseas Investment CTDO and KE wheeling mechanism to bring in the it will impact the cleanliness and a MoU whereby First Solar has Policy support required for these have signed a joint development power to KE network. Generation hygiene of the 7th largest and 2nd is currently engaged committed to developing a 50 MW projects is to have IA from GoP to cover agreement, which defines the license is currently under processing most populous city of the world, with the following solar IPP within KE’s licensed area. political risks, and KE to provide framework within which the three at NEPRA level. Project is expected thus reducing a huge environmental First Solar is engaging local payment risk guarantee. KE has written companies will work together for to come online by first quarter 2016. hazard and diseases spread by open companies to discuss reputable developers/investors to NEPRA and MOWP regarding the setting up the project. The term of the contract is for 25 years. dumps of solid waste. The waste is options for power off and international financial policy framework. Project is expected to eventually either burned or left to take Kinetics Resources institutions, such as SkyPower, OPIC, come online in 2021. The land MoU has been signed with FFBL 52 MW Coal Based Project degenerate on its own, thus for the development of the project. Textile City. HBL has been engaged K-Electric Limited signed the term generating hazardous carbon Energy, UAE. Currently, KE and the developers Wind Initiatives by KE as lead advisor for the project. sheet of its power purchase emissions of the worse kind and are finalizing land options and the In an effort to add nearly 50-100 MW The project (both Units of 330 MW agreement with Fauji Fertilizer directly impacting the health vitals KE has issued an LOI to Kinetics interconnection scheme. of wind power into its system, KE is each) is expected to come online by Bin Qasim Limited (FFBL) for power of the population at large. for the development of 65 x 2 MW currently engaged with wind project early 2019. The total project cost is off-take of up to 52 MW from FFBL’S solar based IPP within KE’s Initiatives to developers to discuss options for $900 Million. project. FPCL has submitted This will be the first project of its licensed area. Term sheet highlighting power off take. generation license application to kind in Pakistan that will provide heads of agreement of EPA for first Procure Hydropower Nooriabad 100 (2x50MW) MW NEPRA, which has been admitted. a preventive approach to generate 65 MWDC signed by Kinetics KE has signed two MoUs with Burj Power Gas-Fired sustained environmental and public Renewable Energy is under Laraib Group (LG) to procure affordable Al Wardah Wind Power and KE The Sindh Nooriabad Power Company FPCL has finalized its power health benefits, helping the society at process. 335 acres of land has been power from 640 MW Azad Pattan have signed an MOU for exploring (Pvt) Limited (SNPC), a company sale proposal and submitted with large apart from being a long-term finalized and the process for purchase project and 250 MW Ashkot options of power off take. Al Wardah sponsored by the Government of KE with a term period of 30 years. solid waste management solution. of land is currently underway. hydropower project. The projects are owns approximately 1200 acres of Sindh (GoS) and Technomen Kinetics FPCL is in the process of finalizing The potential stakeholders of the currently in development phase as IPPs land with bankable data of six years. (Pvt) limited in consortium with their EPC framework. KE intends project have been taken for Meeco Group under the Power Policy of 2002. A draft REP for the feasibility has been China Electric of China, is in the to file for the tariff with NEPRA this initiative, which includes KWS, Meeco group has been issued an Azad Pattan has received its feasibility prepared and shared with Al Wardah process of developing a 100 MW through a Purchase Acquisition Karachi Metropolitan Corporation, LOI of 10 X 3 MW for the development stage tariff by NEPRA. The feasibility for feedback and review. Topographic (2 X 50 MW) gas fired power project Request (PAR). Project is expected Cantonment Boards, WWF, local of solar project in KE’s licensed study for Ashkot is in approval stage survey has also been done. at Nooriabad, Sindh. to come online by early 2017. communities and government of Sindh etc. KE, through various The project is to be set up in Bio Gas – discussions and meetings, has 2 locations (50 MW each). KE has gathered its basic understanding signed a term sheet with SNPC and Worth from Waste and has been offered support and SNPC phase II regarding the power In line with its climate change policy, assistance from these institutions.
0052 Sustainability Report 2014 Redefining the Future of Transmission Impact on the City
Karachi Transmission Project A comprehensive and integrated scope of Transmission Project (TP1000) is conceived to meet the growing load demand of the metropolitan city by up gradation of 01 existing transmission network and addition of new grid Potential increase in KE station and extra high transmission lines. capability to serve additional Transmission project is a major step towards meeting consumers up to 1000 MVA. the growing demand of our rapidly expanding city. It will be vital towards enhancing the operational flexibility of the KE transmission network. This venture will serve to relieve a majority of the overloaded EHT circuits, hence this venture will result in better load management across the city. This project mainly features the 02 following critical areas which will be addressed along Lesser breakdowns in the with rehabilitation and revamping of existing grids and city; no more tripping due to transmission lines: circuit overloading. • Three new 220 KV grid stations at Gulshan, Surjani and Port Qasim areas along with new 220 KV transmission lines of more than 80 KM.
• Five new 132 KV grid stations at Old Golimar, Labour Square, Bath Island, Shadman & Gadap. 03 Lower load shedding, • Addition of 15 power transformers at existing improving consumer life. grid stations.
• Addition of six new 220 KV and six new 132 KV transmission lines.
• Addition of three 250 MVA auto transformers with bays 04 at Baldia, KCR and Mauripur (750 MVA). Reliable industrial power
Based on the transmission network study a detailed supply will provide a boost to tender was floated to international renowned companies economic growth of the city. including Siemens, ABB and ALSTOM T&D divisions with Chinese consortium members including Shanghai Electric Group, CMEC, XIAN Xd and TBEA. Received the bid in November 2014, which is being under techno-commercial review of K-Electric. Contract negotiation with the potential bidder will start soon after 05 the screening process; Environmental Impact Assessment Stable voltage levels with (EIA) and NOCs (No Objection Certificate) have already been much lower occurrence of obtained for the construction of proposed sites of 132 KV grid stations. The project will be kick-started in mid 2015. fluctuations.
54 Sustainability Report 2014 Redefining the Future of Distribution
The initial investment is approximately USD 6.0 million. Based on reducing distribution losses by 50% and increasing the recovery ratio to 95%, the project provides a payback of less than 2.5 years.
Smart Grid drive to benchmark itself KE distribution’s smart grid to international industry initiative is a key strategic initiative standards, enabling remote to establish KE as commercially management, analytics and feasible, best in class utility, serving future enhancements such as a role model for utilities in the as time of use tariffs and country and the region. The project pre-paid billing. aims to reduce Aggregate Technical and Commercial (AT&C) losses Similarly, monitoring devices will be through improved energy monitoring installed to facilitate faster response (impact on the economic viability of over outages on the Medium Voltage the company) and through a (MV) network. Input from these Distribution Network Management devices will be fed into the network System to improve operations and management system to enhance reduce network outage response control room processes. time (operational efficiency and improved customer service). The first phase includes the implementation of IT platform, with With the increased visibility over its 10,000 metering points expected to be distribution network and detailed completed in 2015. KE plans to quickly measurements on its distribution nodes, ramp it up to around 100,000 KE will further enhance its planning consumers in the near future and and load management capabilities. to a potential of 500,000 consumers The scope of the project covers the in the next 5 years. installation of smart meters and introducing an IT platform that The rollout is primarily targeted allows for remote data management toward small and medium size and analytics. Replacing existing industries where energy loss in standard meters on all energy terms or revenue is high and can nodes within the identified cluster be minimized in a short span by the will improve network visibility, use of technology. However, KE enabling KE to manage the current plans the implementation in terms and future energy demand of geographic cluster that contain systematically. The IT platform high revenue commercial and will be the basis of KE’s industrial consumers.
56 Sustainability Report 2014
Awards and Recognition
Financial Times/ IFC Global Transformational Business Award for Exceptional Outstanding Corporate Volunteerism Award -2014 - Recognized by INJAZ for involvement Achievement in Project Finance – Energy - June 2014 (Only company in the energy sector to in the pilot phase of INJAZ Pakistan. win this international award).
NFEH Energy Leader Award - 2014 – Recognized for best practices in Energy 9th Employers Federation of Pakistan in Collaboration with ILO Conservation, Energy Efficiency and Implementation of Efficient Practices by the National (International Labor Organization) – April 2014. Forum for Environment & Health supported by Government of Sindh, the FPCCI and the Karachi Chamber of Commerce and Industry.
4th International Corporate Social Responsibility Award – February 2015 – recognized for UN Environmental Program (UNEP) / NFEH Environment Excellence Award - July 2013. Corporate-Community partnership by the Professionals Network in collaboration with CSR Association of Pakistan, United Nations Global Impact and Ethical Business Update.
BQPS 1 ISO 9001, OSHAS 18001, EMS 14001 (ISO 14001) Fire & Safety Award – 2013 – Recognized by National Forum for Environment and Health BQPS 2 ISO 9001, OSHAS 18001, EMS 14001 (ISO 14001) (NFEH), supported by United Nations Environmental Program (UNEP) and Fire Protection CCPP Korangi ISO 9001, OHSAS 18001, EMS 14001 (ISO 14001) Association of Pakistan (FPAP), a member of Confederation of Fire Protection Associations SGTPS ISO 9001, OHSAS 18001, EMS 14001 (ISO 14001) International (CFPA-I) & CFPA-Asia . KGTPS ISO 9001, OHSAS 18001, EMS 14001 (ISO 14001)
2nd FPCCI Achievement Award for the Year 2013 - presented for unprecedented First Distribution facility in Pakistan to get ISO 9001-2008 Certification for improved investment of USD 1 billion in power generation along with introducing efficient and performance and operations for the following IBC’s: SITE, Clifton, KIMZ, Gulshan, Defence, effective policies to overcome the power crisis in the city.
Corporate Social Responsibility Awards 2013, 2014 & 2015 – By the National Forum for JCR-VIS upgrades ratings of K-Electric Ltd; Continuous improvement in KE’s Environment and Health in collaboration with Aman Tech, The Citizens Foundation, WWF, operational metrics – JCR-VIS KESC assigned A+/A2 ratings by JCR-VIS Asia; Make a Wish Foundation, Indus Hospital and Marie Adelaide Leprosy Centre proposed finance certificates obtain A+ --- November 2013
6th NFEH Environment Excellence Award – 2014 - presented by National Forum for Environment and Health (NFEH) in collaboration with the UN Environmental Program (UNEP) and the Environment Protection Department, Government of Sindh.
0058 Sustainability Report 20152014
Financial Value Creation
Jinnah International Airport, Karachi Sustainability Report 2014
Financial Sustainability
Financial Highlights (PKR in Millions) Since the past three consecutive financial years, KE has showcased sustained positive financial performance as our reform actions in the form of on ground projects reap expected fruit, and even better results. Revenue Revenue 2014 194,708 2013 188,999 In November 2012, JCR-VIS Performance Standards on Social requirements of the company. Asia assigned entity ratings of and Environmental Sustainability, The instrument was rated “A+/A2,” whereas its proposed and the relevant ADB EHS guidelines “A+” (A plus) by JCR-VIS Credit finance certificates obtained Rating Agency and International preliminary ratings of “A+” by As part of its financing requirements, Islamic Rating Agency, Bahrain. JCR-VIS Credit Rating Company ADB also requires implementation of It is also listed on Pakistan Stock Gross profit Gross profit Asia, in recognition of the power the ESMS (Environmental and Social Exchange and received great 2014 32,418 2013 28,820 utility’s high performance within Management Schedule) in accordance response from the local financial a short span of time. Outlook with its safeguard policies (Environment, market and the whole issue was on the assigned ratings was Involuntary Resettlement, Human subscribed to within the first ‘Positive’. These ratings appreciate Rights), and the technical standards 12 hours of subscription. The the strategic importance and required in the IFC documents. IFC, issuance of KE AZM Sukuk laid the strong business profile of KE. ADB and OeKB-(Austrian ECA) a foundation stone for Pakistan’s Profit before tax Profit before tax This was supported by the were our major investment non-existent Capital Market for 2014 2013 enhancement of KE’s power partners. The reduction in T&D retail listed Sukuk instrument. 9,575 4,001 generation capacity, reduction in losses, together with improved fleet transmission and distribution efficiency impacted an The issuance of Sukuk losses, a stable and professional improvement in EBITDA by 12% of PKR 6,000 million management team, and, over the last two financial cycles: improvement of its financial risk has received awards profile over the past 5 years. Financial Initiatives and acknowledgements Profit after tax Profit after tax AZM Sukuk of PKR 6,000 million on various forums i.e. 2014 12,887 2013 6,826 Over the years, many international (March 2014) 2nd prize in ICAP financial institutions have expressed The Issuance of AZM Sukuk of PKR confidence in the organisation’s 6,000 million in March 2014 was Professional Excellence financial prospects. In the last Pakistan’s first ever rated, listed Award and award from three years the IFC and ADB have and secured retail Sukuk issuance. invested major shares, USD 1 The Sukuk proceeds were utilized to South Asian Federation Earnings/Share (PKR) Earnings/Share (PKR) billion debt and equity into KE. fund the permanent working capital of Exchanges (SAFE). 2014 0.47 2013 0.26
FY-09 FY-10 FY-11 FY-12 FY-13 FY-14 HY FY-15
Net Profit (PKR billions) (15.5) (14.6) (9.4) 1.8 6.8 12.9 13.3 EBITDA* EBITDA* 2014 2013 Net Profit (USD millions) (197) (175) (110) 29 70 125 131 30,159 26,903 * Earnings Before Interest, Tax, Depreciation and Amortization. * Earnings Before Interest, Tax, Depreciation and Amortization.
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Harmonizing Shared Value
Supreme Court of Pakistan (Karachi) Sustainability Report 2014
Shared Growth – Human Resource
The work environment and culture creation of of 3,500 non-management to financially viable offer that would We care for our employees’ progress opportunity in the workplace to at KE enables the individual management cadre followed by facilitate them to attain a better so that we can build our “next in line attract and retain the most skilled growth and development of our performance driven regularisation of 5,700 lifestyle and better growth leaders” who will propel the company personnel in the industry. Given the workforce through strategic workforce optimisation contractual staff to successful opportunities. The total estimated to sustained growth, profitability, and level of expertise required of our human resource management. (reduction of headcount implementation of Voluntary payout was between PKR 5.5 to 6 operational excellence in the coming employees, we ensure rewards and Our aim is to provide an Separation Scheme (VSS) has billion and the payback was 4.5 years. years. We promote a result-oriented remuneration are in compliance with atmosphere that brings out the by approximately 7000 been key for the creation of a Despite the Union’s disruptions and workplace and provide our existing legal and statutory wage best in all our employees while from 17,436 to 10,530) dynamic and performance non-ethical, often criminal, acts to employees with training and requirements nationwide, internally instilling in them a sense of oriented organisation. On 31st make this scheme unsuccessful, the education so that they can be the best equitable, and market competitive. ownership and loyalty towards the Effective management of December 2010, KE launched its majority of the 4,500 targeted in their fields of expertise. We believe A leadership development organisation. Human Resources is a major Voluntary Separation Scheme employees chose to accept and only a highly trained and motivated programme supports succession milestone achieved for the (VSS), offering approximately benefit from this offer, making the workforce can fortify the company’s planning and management, and we Enhanced workforce successful turnaround of the 4,500 non-core, non-management VSS a success. As of December 2014, leadership position and reputation for make it a point to monitor the career company. Right sizing the employees the chance to leave management headcount stands at excellence. We seek to be the best development of each employee. effectiveness through organisation through Conversion the organisation through a 5,708 and non-management at 4,822. employer and we uphold equal
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Jun-12 Jun-13 Jun-14 Dec-15 Total number of employees 11,377 10603 10242 10530 Percentage of regular employees 98% 97.8% 96.7% 95.8% Percentage of contractual employees 0.5% 0.3% 0.2% 0.2% Percentage of trainees 1.5% 1.9% 3.1% 4.1%
Employment Type Jun-12 Jun-13 Jun-14 Dec-14 Management staff 5,593 5280 5277 5708 Non-management staff 5,784 5323 4965 4822 Number of trainees inducted 174 216 210 90
Employment by Age Group Jun-12 Jun-13 Jun-14 Dec-14 Female 21-30 87 103 109 139 31-40 54 53 53 53 41-50 29 26 21 24 Standard Guiding self-accountability and The appraisal system is based on 51-59 32 19 14 14 transparency in word and spirit. bi-annual review – preliminary and Human Resource Policies 60 & Above 0 0 - - A HR legal cell was formed in Final (June/December) and a “Bell We respect the universal January 2010 in order to take Curve” approach. We have ensured Male declaration of human rights and the disciplinary action where that the system is based on an 21-30 1780 1802 1771 1991 International Labor Organisation's required – resulting in systems organisation-wide transparency fundamental conventions on core 31-40 3504 3412 3436 3545 and anti-corruption policies policy. Each appraisal is validated standards. Our code of conduct and created to deal with misconduct by the HR Committee for each group 41-50 3110 2811 2570 2510 ethics is designed to protect our and integrity issues. via the group head’s presentation. 51-59 2748 2375 2268 2254 employees by creating a comfortable Implementation of disciplinary work culture. We also maintain 60 & Above 33 2 - - committee for the first time The organisation links its strict anti-corruption policies and resulted in dismissal of 1,175 compensation with performance procedures with a thorough employees of all cadres due to and its salary scales are investigation process. The existing corruption, theft and misconduct. transparently broadcasted. Employment Type Jun-12 Jun-13 Jun-14 Dec-14 open-door policy at KE allows for Within the last five years, we have Female any employee to contact senior Performance and Reward been able to complete the reform Contract 1 0 0 0 management freely regarding any We completed our fifth round of of our human resources system issues related to the working Regular 179 164 170 191 Annual Performance Appraisal by linking compensation with ESG conditions and environment. through a Bell Curve evaluation performance. Weightage of around Trainee 22 37 27 39 system for management and staff 5% in the overall performance Male Accountability and Transparency and initiated a 360 degree appraisal is given to safety policy Contract 51 27 19 17 A stringent self accountability performance review. “Variable implementation and adherence. In survey of all the employees of Regular 10,939 10,206 9736 9894 Yearly Performance Reward Matrix” the coming years volunteerism and K-Electric was conducted in has been implemented for all climate change policy implementation Trainee 185 169 290 389 order to implement the values of employees this year as well. will also be given due importance.
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KE’s Salary Scale Employee Turnover * by Age-Group & Gender Min. per Annum (PKR) Max. per Annum (PKR) Year 2013 Year 2014 (As of December 2014) Top Level 2,913,036 11,329,296 Age Group Female Male Total Female Male Total Senior Management 1,355,964 6,943,692 20 – 30 19 155 174 15 94 109 Middle Management & Below 162,600 3,366,444 31 – 40 8 109 117 2 42 44 41 – 50 4 131 135 1 34 35 The following table presents KE’s annual increment matrix and how it links performance to compensation at the moment. 51 – 59 12 302 314 0 77 77 Our Annual Increment Matrix 60 & above 1 210 211 0 59 59 BE ME EE OS Grand Total 44 907 951 8 306 314 Top Level 0.00% 6.50% 8.00% 11.50% Senior Management 0.00% 7.50% 9.50% 12.50% Rate of New Hires by Age & Gender Middle Management & Below 0.00% 9.00% 10.50% 14.00% Age Group 2013 2014 (As of December) and LUMS and Engineering schools opportunity to build their careers Employer of Choice 20 – 30 83.4% 73.6% Today we can proudly claim to be like NED, NUST etc. To date, since within KE at positions that match 31 – 40 10.0% 21.1% among the top preferred employer 2008 we have inducted 927 young their skill sets and career list for fresh graduates. Our professionals under our Management aspirations. For various positions, 41 – 50 5.6% 4.6% Graduate Trainee Recruitment Drive Trainee/Trainee Engineers programme KE sought out individuals with 51 – 60 1.0 % 0.8% from various top-ranked institutes. relevant experience in blue chip has been our focus in order to Gender create the future workforce for KE. corporate entities, including the Male 93% 91% The programme has become very Internal Job Postings have been Power Sector, Engineering and popular among graduates of all successful in motivating current FMCG Sector, Financial Sector Female 7% 9% reputable business school like IBA employees by giving them the and other organisations.
The next tables present KE’s employee turnover rates, broken down by gender and age. As the tables show, the rates are also in line with our move to inject new blood into KE.
Rate of Employee Turnover
Total Resignation & Total Female Male Year Retirement Cases Headcount HC %age HC %age HC %age 2012 11,377 417 3.67% 11 3% 406 97% 2013 10,603 873 8.23% 52 6% 821 94% 2014 10,530 324 3.08% 18 6% 306 94%
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Maternity Leave to achieve a healthier ratio to Celebrating Diversity balance out our human resources and Turnover K-Electric is an organisation committed to sharing in the coming years. With a base values of diversity and inclusion in order to achieve Our retention rate is 100% for all of 10,000 employees, plethora of and sustain excellence. female employees who have availed ethnicities, today’s KE is a truly maternity leaves. Despite there being cosmopolitan workforce. We firmly believe that we can best promote no concept of paternity leaves in excellence by recruiting and retaining a diverse Pakistan, we allow our male employees Accordingly job grades and salary group of employees by creating a climate of to avail said leave when need be. ranges are the same across all job respect that is supportive of their success. The levels, regardless of the gender increasing population of females at K-Electric Inclusiveness & Diversity or ethnicity of the employee. was felt with greater impact when a room full of Equal opportunity and the protection Nevertheless, KE did inherit a KE’s female employees buzzed with energy and of human rights are foundations of situation whereby the length of enthusiasm to interact with their CEO. our corporate culture and people service, experience, performance development. We recognize the ranking, and other factors that It was for the first time that an interactive diversity of talent in our workplace determine compensation vary session was arranged for females to discuss and the unique perspectives they across gender. This currently various aspects of organisational sensitisation bring to the business. Thus, we work translates in a pay differential, but for a more facilitating work environment. hard to foster an environment of does not in any way influence the inclusiveness, where each individual pay ceiling of our female workers. Various relevant issues with regards to can flourish to the best of his/her ability. retrofitting, transportation, childcare and The differential is expected to training, etc. were raised along with some very We currently employ 13 employees equalize over time as our new female useful suggestions by the participants. Mr. with special needs in the hires accumulate experience, service Nayyer Hussain responded to the various organisation and are in discussions time and performance related queries and suggestions very objectively. for retrofitting our offices for capacities. Since the difference is accessibility, helping with policy negligible and we do not want to Following the session various decisions have implementation and sourcing create any policy level gender biases been taken to facilitate females for a fulfilling talent. There is a strong presence of among employees, so over time as career at K-Electric. females in our workforce, the female population grows in the especially in the management organisation, we are consciously cadre. Although the numbers are closing this gap and there is no still very small, making up almost gender wise differential practiced 2% of the employee-base, we hope in the current hiring.
Pay Differences Across Gender Average Remuneration of Men to Women Dpt. General Manager 1:1.04 Manager 1:0.98 Dpt. Manager 1:1.09 Assistant Manager 1:0.95 Senior Officer 1:1.01 Officer 1:0.84 Junior Officer 1:0.84 Non-Management 1:0.89
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Training Our Employee Participation, basis of their welfare orientation and Gratuity Scheme 01 leadership potential to act as a conduit The scheme provides a graduated Training, certification and promotion of 855 Karkuns in the Next Line of Leaders Welfare and Support between management and workers. scale of benefits, dependent upon Semi-Skilled Lineman Training Programme. In a highly technical, specialized During the past three years we length of service. business such as ours, there is only have not had a Collective The management has renovated one standard to aim for: excellence. 02 Bargaining Agent due to host of 50 canteens spread over the length Post-Retirement Medical Benefits We believe that competitive advantage unanticipated legal complications and breadth of the company. Employees and their dependents are lies in continuously enhancing the Total 12,973 Employees trained since January 2013 till July 2014. arising out of an amendment in the Every canteen has a canteen entitled for coverage up to a period capability of our employees and Constitution declaring “Labor” as an committee consisting of 3-4 workers of 10 years and 5 years, respectively. strengthening expertise in their exclusively provincial subject. The to help local management in its respective disciplines. Given the skill 03 matter is now pending in the courts supervision. Canteen committee Electricity Rebate and level of expertise required of our of the country. members also facilitate fellow KE provides a rebate on electricity Total training budget for FY2014- 2015: PKR 99.75 million. employees to maintain our leadership Nevertheless most of the workers by bringing their concerns bills to eligible retired employees for position, training is the focus on settlements and agreements and problems to the notice of the the first five years of retirement. which we build excellence. entered into with the Collective local management. The company also provides leave 04 Bargaining Agents/Unions in the entitlements and generous medical Standardized and structural learning Total training man-hours of 240,048 hours since past pertaining to salaries, The IR’s welfare officers facilities. Upon retirement, employees interventions through “AZM“ January 2013 till July 2014. allowances and benefits are in force constantly remain on the move are also entitled to avail pension Learning Institute have introduced in letter and spirit. In fact the and visit various locations as per benefits under the EOBI scheme. the largest management trainee 05 company has unilaterally enhanced/ their schedule. They are a very programme in the country. enforced certain monetary and useful vehicle for resolution of The organisation operates a Induction and training of 927 management trainees, trainee welfare benefits which were not even employee problems at local Level contributory provident fund for engineers, trainee accountants since 2008. Training, certification & promotion of contemplated in the settlements. and also bring them to the notice all its eligible management and 855 karkuns in the Semi-Skilled of senior management. non-management employees. Lineman Training Programme. Career Progression Internal Job Postings The management has ensured Equal monthly contributions are Extensive career progression based Internal job postings have been participation of employees through Retirement Benefits made to the fund, both by the Total 12,973 employees trained since trainings conducted to promote successful in motivating current a variety of means. About 150 We offer the following three organisation and the employees, January 2013 till July 2014. Karkuns to Semi-Skilled Linemen. employees by giving them the employees were selected on the schemes to retired employees: at the rate of 10% of basic salary. 20 batches have completed training opportunity to build their careers Total training budget for FY2014- and 823 employees have been within KE at positions that match Benefits provided to full-time employees that are not provided to temporary or part-time employees 2015: PKR 99.75 million. promoted through this programme. their skill sets and career aspirations. Car & fuel allowances as per entitlement (manager to GH level) Total training man-hours of 240,048 Other training and development Mobile phone & Blackberry handsets with allowances since January 2013 till July 2014. initiatives include the First Time Succession Plan Leave fare assistance (one gross per annum) Supervisory Programme for employees A succession plan has been Financial assistance in case of natural or accidental death Induction and training of 927 who are new to supervisory roles, implemented for Deputy Medical services management trainees, trainee the emerging managers programme General Managers and above engineers, trainee accountants for high-potential management throughout the organisation by Hajj leave (once in whole service), iddat leave, maternity leave & regular 30 days leave per annum since 2008. employees, technical training highlighting subordinates who House accommodation up to manager level programme for our field staff, the can step up to fulfill senior roles Individual Career Development business catalyst programme to in the next 2, 3 and 5 years. The Employee retirement benefits 2013 Jan-June ‘14 Jul-Dec ‘14 2014 warrants special focus in order for inculcate forward thinking and the aim is to provide these individuals Gratuity 3,879,895 3,973,534 4,128,210 8,101,744 an organisation to develop as a motivation to achieve business goals with the right trainings for them Post retirement medical benefits 1,058,868 635,102 659,093 1,294,195 whole. Our interventions ensure and workshops to tackle commonly to realize this potential and Post retirement electricity benefits 307,025 337,585 344,249 681,834 progression and development faced difficult situations during move ahead in their careers. through the following mechanisms: customer facilitation. Total 5,245,788 4,946,221 5,131,552 10,077,773
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Shared Protection – Health & Safety
KE is committed to protecting the safety and health of its more than 76% 10,000 workforce employees and their families. We are also committed to spreading awareness with regards to public safety. Incidents
Reduction
Commitment to achieve our health vital controls, and effectively regularly and the sustained system Reduction in Employee Accidents and safety goals is an embedded checking that controls are in place compliance is encouraged through value at KE. The new management at all times. Safety Management has cash awards and organisation wide took on a very aggressive approach been made an important personal recognition. to Health and Safety and over the objective for every employee of KE last five years we have created a as a mandatory commitment in their The sustained efforts have left a 82% Health and Safety management annual performance appraisal. positive mark, a fact confirmed system that drives compliance with through the radical reduction in Incidents the policy, continuously improves In the utility sector, KE has attained employees’ accidents by 76% and our performance and measures our a thought leadership position and public accidents by 82%. Our basic Reduction actions against our words. has created safety compliance theme of safety of employees, Reduction in Public Accidents benchmarks for the overall sector to contractors and assets was Our employees’ health and safety follow. Over the last five years we rewarded in 2013-14 with overall are of utmost importance as we have shared our leanings with other accidents reduced by 32% (34 to 23), tackle some of the toughest safety utility providers and have also year-on-year. Employee accidents challenges. We aim to have zero earned recognition in the form of were reduced by 12% (25 to 22) 83% fatalities and no incidents that harm awards. Our success rests on a accidents), with fatal and minor people. We put extra focus on culture aimed at inculcating safety accidents reduced by 57% (9 to 3) Incidents managing the most critical safety oriented values, for self, peers and and 23% (12 to 10), respectively as risks. We work to mitigate these assets of the organisation. Safety compared to 2012-2013. Reduction risks by enforcing compliance with audits are being conducted Reduction in Asset Damage
Accidents - Catagory 2012-13 Vs 2013-14 Fatal Major Minor Asset 54% 2013-14 2 9 10 1
Incidents
2012-13 7 5 13 9 Reporting Public Reporting in Asset Damage
0 5 10 15 20 25 30 35 40
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Safety Management - Regular safety oversight audits resulted in bringing down the year, more than 1,228 such audits implementation of recommended families of employees, under the accident rate of 2.3 accidents per conducted by corporate HSEQ actions and recurrence of such “We Care” programme. The System - Hazard identification hundred thousand interruptions to teams were closed and incidents could be prevented. programme was aimed at providing A comprehensive Safety Management 1.39 accidents per hundred recommended corrective measures preventive vaccination and System (SMS) was designed on the - Risk management thousand interruptions. were implemented by the concerned Percentage of medication against leading causes principles of ISO 9000, ISO 14000 departments. of diseases in Pakistan. Improved and OHSAS 18000, with a strong Employees in HSEQ - Developing emergency response Safety Training health resulted in lower absenteeism focus on: plans, etc. Emergency Response Plans have and more efficient employees. A total of 16,708 employees have department are 0.4% been prepared for all locations of been provided safety training, with apart from around 400 - Evolving a safety culture through All five KE generating stations strategic importance, such as power Regular vaccination campaigns 11,415 staff members trained last development of policies and achieved OHSAS 18001:2007 plants, head offices, grids, IBCs, etc. safety wardens across were run throughout the year year alone. Employees were trained procedures certification. and periodic evacuation drills are to provide employees and their for 27,554 man-hours on subjects the organisation. being conducted to ensure awareness families with immunisation at their ranging from basic safety, tool-box - Garnering employees’ Business units were also amongst all staff members on actions doorstep against Hepatitis-B and talk, environmental awareness, first This reduction in accidents has not involvement by sustained safety encouraged to take safety initiatives, required to be taken in emergency other highly infectious diseases. aid, fire fighting and summer only shown continual improvement and task-oriented trainings such as near-miss reporting, situations. More than 300 emergency The immunisations were also made preparedness to effective in our safety management system tool-box talks, evacuation drills, job drills conducted this year with safety available daily at our centres. The communication, etc. To monitor and and raised employee satisfaction, - Defining safety responsibilities specific trainings, internal audits, wardens in place within all major areas. vaccination drive was in line with measure effectiveness of the safety but has also reduced financial cost and accountabilities and safety walks to name a few, the W.H.O health programmes, management system in KE’s of accidents by up to PKR 20 million which resulted in a significant Investigation of all occupational conforming to the National Health licensed area of 6,500 square during the year. - Linking individual safety reduction of occupational incidents accidents of fatal, major, minor and Programme and Expanded kilometres, a spot check and survey performance with annual appraisals throughout the organisation. An asset nature have been conducted Programme for Immunisation (EPI). system was established to perform increase of 38% in safety initiatives by HSEQ investigation teams, along Employee Wellness random safety audits of field - Awarding safety rewards and reprimands (Training from 853 to 1,777, with concerned departmental Employee health and wellbeing The vaccination campaign achieved activities performed at grid stations, Near-Miss reports from 213 to 518, representatives. They identified root remained a top priority. A new very encouraging results by reducing power plants, transmission - Disseminating lessons learnt from Safety Walks 8312 to 13425 and causes and other contributing dimension was added to our Health Hepatitis-B cases by 73% (100 to 27 corridors, HT and LT distribution accident investigations Tool-Box Talks 21,355 to 31,490) factors of accidents, so that these and Safety vision when its scope employees) and reporting of sick network, new connections, etc. This could be mitigated through was enhanced to include the children to the medical O.P.D for
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highly infectious diseases like were given thorough annual general wellbeing. In this respect Fire Safety Drill during the monsoon season, electrical hazards in their vicinity. Typhoid, Measles, Mumps and medical check-ups. Employees 4,532 workers were checked and Drills are conducted on how to through extensive coverage in Quick response to resolve the Chicken Pox, etc. It is also very who had fitness problems were 25 contagious diseases were use fire extinguishers and the electronic, print and outdoor reported issues is being ensured by promising to note that not a single either treated and made fit before identified and reported. 349 hygiene importance of their usage. media. Public outreach activities an efficient team that is available case of polio was reported during taking any high-risk jobs, or were workplace inspections conducted like stall activation in malls, school round the clock. In 2013-14, 563 the year. The vaccination drive was retrained to relatively simpler or to ensure better work place hygienic programmes and other public hazards were reported on KE Safe supplemented by an awareness less risky work. In this way, an conditions. These were integrated Public Health and Safety awareness talks are also organised Card like tilted poles, wire loose, campaign created through regular important segment of a highly with awareness sessions on For the first time in Pakistan, on an annual basis. broken conductors, tree branches talks and printed information trained workforce was utilised “First Aid” and “Ways to Improve a power utility invested marketing touching conductors etc. All of against epidemic diseases like with more efficiency and Personal Hygiene” These efforts dollars to ensure that everyone is them were reported on top priority safe. On an annual basis, we launch A ‘Safety Hazards’ reporting Dengue Fever, Swine Flu, Bird Flu, effectiveness. Six-monthly health were major contributors in basis resulting in reduction of marketing awareness campaigns button is placed on KE’s website to Typhoid Fever and Heat Stroke. and hygiene check-ups of workers reducing work-hour loss through public accidents by 82%. on general public safety, especially facilitate the public in reporting Senior workers (above 55 years) remained in focus for improving the “We Care” programme.
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Sustainability Report 2014
Shared Progress – Supply Chain
KE offers strategic support to partner suppliers, understanding that the growth of its suppliers directly translates to improvements in its own competitiveness and quality.
Increasingly, shared growth strictest of ethical standards and purchase and reduce dependence on Database Management System with Advance material planning for TSW one year. The initiatives and steps between big and small businesses norms including all governing labor suppliers that monopolise the a GIS overlay, covering aspects of has been initiated which has led to a taken with respect to KE’s supply is becoming a matter of global laws and code of conduct and ethics. market, new contracts have been property data and space utilisation. reduction in material stock outs. chain are primarily aimed at the significance. KE’s supply chain KE works to implement principles of introduced and new suppliers have streamlining and automation of involves not just the methodical shared growth with its suppliers in been taken on board for the Systems at Inventory Management The fleet management department relevant processes to increase sourcing of material and services order to create a mutually beneficial procurement of goods and services. have been improved through the has implemented a cohesive fleet efficiency and control, while lowering from suppliers and vendors, it business ecosystem with them. Over implementation of SAP and the management solution and the costs associated in these areas. essentially means the very system 75% products and services procured Effective management of real creation of inventory and scrap successfully reduced the fleet that allows the rest of the locally with a base of 2,777 suppliers. estate and works has seen several disposal management portals, all age. 181 new fuel efficient MTLs All this needs to be done in a socially organisation to perform its construction and renovation projects associated processes have also been have been inducted. The capacity of responsible way by conducting day-to-day operations without Over the course of the fiscal year, delivered, while the number standardized by developing SOPs. We KE’s transformer workshop has business with ethical suppliers; the interruptions. At KE, supply chain several improvements have been of rented premises has also been have also incorporated a PR release been enhanced and it now also idea being to support the rest of the has the added responsibility to made to existing systems, as the reduced as part of KE’s rent-free strategy and a Warehouse repairs switch gears and isolators organisation and augment its smooth ensure that we move our business department continues to upgrade vision. We have implemented Management System for improved mechanisms. 2,564 transformers operation allowing us to further thrive as to entities that adhere to the itself. To reduce lead times of an online centralized Real Estate stock visibility and traceability. have been refurbished in the last the region’s flagship energy provider.
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Harmonizing Shared Impact
Mohatta Palace, Karachi Sustainability Report 2014
Social Impact
We have consciously developed a 360° value creation model that guides us in defining our role in much broader terms and puts greater focus on building strong ties with all our key stakeholder groups, ensuring regular, open and transparent two-way communication, something that was neglected completely in the pre-privatisation era.
We believe that business and society Of these, the most important is Metering project will further are interdependent. This belief the production of electricity from eliminate manual meter reading drives our commitment to create coal and conversion of selected with the intent of reducing errors partnerships based on mutual production plants accordingly. We due to human intervention. benefit, or shared progress. At KE are also pursuing projects in wind, partnership is a value that we honour solar, hydro and biogas. The efficiencies built in KE every day, from our business to our reflected in the industrial growth social investments commitments. A deeper customer focus and the of the city, supplier chain was commitment to reduce losses strengthened, and regular paying Addition of 1,010 megawatts pushes us to invest and innovate in consumers benefited from the of new generation capacity has our system enhancement and loss segmented model. The trickledown strengthened our generation fleet. reduction initiatives. The Smart Grid effect reflected both in terms Our long lasting endeavor is to project will further enhance our of the economic and social value ensure reliable and cost-effective capability to reduce Aggregate creation as the overall life of the energy supply with minimal Technical & Commercial (AT&C) ordinary citizen of Karachi was environmental impact. This has losses through improved energy improved. Since Karachi pushed us to pursue plans to use management and through a contributes almost 20% to the cost effective, low carbon and Distribution Network Management total GDP of Pakistan, and is the clean fuels: coal, natural gas and System which will reduce network industrial hub of Pakistan, the renewable forms of energy. outage response time. Mobile overall economy is strengthened.
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Our Sustained Impact
10,500 3.4 Mn $1.2 Bn PKR 70 Mn 58% 2.4 Bn+ Approx. direct job creations People impacted Invested in Generation, Given Under Social of Karachi Load Shed Exempt Households, Industries and directly through our Social Transmission & Distribution Investment Programme Commercial Ventures Investment Programme Infrastructure Lighted by KE
6500 KM 1037 MW 1,000,000+ 53,000 75%+ 15% of Total Area Powered Generation Capacity Added Citizens of Karachi Sensitized Industries are load shed exempt Products and Services of The Total Energy Portfolio by K-Electric to Installed Capacity Through Energy Conservation Procured Locally to be Converted to Renewable Programme Energy Sources
12 Grids 768 MVA 700 MV 2,777 12 New Grid Stations Built and Added to the Development of 700 MV Suppliers 20 Existing Ones Rehabilitated Transmission Capacity coal fired power project at Port Qasim
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Social Investments
We firmly believe that KE's own sustainability is fundamentally linked to the economic, social and environmental values that we create for a diverse set of stakeholders whom we serve and engage on a daily basis.
In accordance with its belief that that directly impact the quality of life business can prosper only when the of the masses facilitating them with society within which it operates provision of their basic needs. The remains healthy, KE maintains a approach we take allows us to benefit wide range of CSR activities in order from our operational capabilities to help build a better society for all. and the experience of our workforce. KE works to contribute to the improvement of communities in Under this programme we also areas such as poverty reduction, cover unforeseen calamities and health, education, skill development, emergencies and facilitate the environmental protection, and victims through relief up to six energy conservation. KE regularly months on their electricity bills. conducts studies on potential environmental and societal impacts Empowering whenever it plans to develop a new project. KE takes care to ensure that Through Power its new projects not only facilitate lives The Empowerment Programme through provision of uninterrupted provides relief to social welfare quality power but also contribute to organisations in the healthcare making the community healthier. and education sectors. So far, under this initiative, agreements for provision of subsidized or Social Investment 100 percent free electricity have Programme been signed with 13 major lifeline The impact created by our Social health and education institutions Investment Programme is huge. We of the city. These organisations empower through power. The act as life support for the umbrella programme undertakes underprivileged and masses all initiatives that facilitate life line and have huge impact on millions welfare organisations and entities of lives in the city.
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Impact (Persons) Indus Hospital Impact (Persons) Karwan-e-Hayat Providing state-of-the-art, free-of-cost, tertiary level healthcare with a Leading provider of psychiatric care, offering a full range of services for focus on research. Indus Hospital is implementing a master plan which the mentally ill. 560,000 will make this hospital the biggest tertiary care welfare hospital. 32,000
Impact (Persons) MALC (Marie Adelaide Leprosy Centre) Impact (Persons) SOS Children’s Village Pakistan Working for Leprosy elimination, TB and Blindness Control and A home like orphanage which provides loving care, security, higher 33,000 Community Development for the last 56 years with a well-knitted network. 7,300 education and job-training, allowing the children to live normal lives and to develop a sense of confidence in them to develop their full potential.
Impact (Persons) SIUT (Sindh Institute of Urology & Transplantation) Impact (Persons) Behbud Association One of the largest urology care and renal transplant institution in Asia 50 years of empowering women, children and their communities by provides specialized medical care to patients suffering from kidney, liver, providing healthcare, education & income generation opportunities. 1,873,314 related cancers and ethical transplant procedures “Free of Cost". 125,000
Impact (Persons) TCF (The Citizens Foundation) Impact (Persons) The Kidney Centre Pakistan’s leading organisations in the field of formal education The Kidney Centre is a proverbial oasis of complete medical relief and 58,000 providing 100% free education to the underprivileged of Pakistan. 62,000 treatment and the premier philanthropic institution for renal and renal-related diseases.
Impact (Persons) LRBT (Layton Rahmatulla Benevolent Trust) Impact (Persons) APWA RLCC Provides comprehensive eye-care, ranging from simple refraction to Working for the empowerment of youth and women of the area through 520,348 the most advanced retinal surgery and corneal transplants. 42,730 improved health, education and economic independence.
Impact (Persons) Bait-ul-Sukoon Cancer Hospital Impact (Persons) FESF With 50 beds for inpatients and diagnostic facilities of mammography, Dedicated to enhancing the quality of life for the disadvantaged 5,400 ultrasound radiography, pathological laboratory and in-house pharmacy, 57,647 members of the community by investing in their educational Baitul-ul-Sukoon offers a complete range of cancer treatment. development, and empowering them to reach their full potential.
Impact (Persons) Lady Dufferin Hospital The largest maternity hospital of Pakistan providing state-of-the-art Total 90,000 mother and child health care being managed on a nonprofit basis. Impact 3.4 million
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System Enhancement Programme the Deewan Farooq Complex of SIUT Emergency Investment Programme distributed were donated a massive 2.9 MW solar-charged study lamps among connection under KE’s empowerment Response Initiative high performing students of The Calamity (Approx) Under this initiative KE provides uninterrupted supply of electricity to and system enhancement plan. This Citizens Foundation School. In times of calamities like fire would help SIUT channelize their 23 major hospitals and educational institutions in the city that provide incidents and bomb blasts, KE has efforts to improve healthcare always stepped forward as the only services to nearly 80% of Karachi. Dedicated feeders and PMTs are provision to the patients. The total Solar Study Lamps corporate entity to provide support investment amount of the system Distribution provided free of cost along with the system enhancements required to victims of these tragic events and enhancement is 7.1 million PKR. 90 top performing students at the to allow smooth running of operations. has created an example for others TCF, Qayyumabad school were LRBT (Layton Rehmatullah to follow. We supported the victims awarded Solar Study Lamps with Benevolent Trust) – catering to 0.5 of the Kharadar fire incident, Abbas dual charging by solar power and million patients annually LRBT is a Town, Baldia industrial fire incident electricity by the chairman of KE. Individuals Annually partner under KE’s Social and most recently supported the 3.4 Million Investment Programme. A 3-phase victims of Timber market fire incident. This marked the first step of the Impact connection allowing usage up to Monthly electricity bills for then project initiated by KE, under which PKR 70 Million Spent in 2 Years 20 Kilowatts was donated to LRBT’s current and next six months were KE would be providing solar lamps North Karachi facility. The social waived for the affectees of the tragedies. to all secondary high academic investment amount for system achievers in eight campuses of the TCF. upgrade is 266,000 PKR. KE’s initiative has been reciprocated by other entities especially utilities With the solar-charged lamps, like SSGC as well. which have a battery life of 6 hours, Employee Volunteering students would have an alternate Our employees regularly participate KE – TCF School source of emission free light for in the INJAZ Pakistan, TCF Rahbar The newly-constructed TCF studying. KE’s objective through this and TCF Career Counseling school built on 5,000 yards land project is to provide extended study programmes. They also conduct donated by KE within the KE’s hours to students giving them an Management Workshops to aid the employees residential colony has opportunity to enhance their capacity building of our Social become one of the flagship academic performance. Investment Partners. Technical campuses of TCF in Karachi. With training and plant tours are a capacity to incorporate 1,000 conducted by our technical experts students, with huge sport grounds Supporting Our imparting knowledge and and airy classes, the campus Culture and Heritage strengthening our knowledge fills a gap to service the whole Through our support we aim to sharing platform. of Bin Qasim area. contribute to different platforms KE provides capacity enhancement been implemented for three major suffice to the expansion project to a which include cultural events and through investment in the overall hospitals, all of which are our 1,500-bed hospital. The investment Over 3,000 hours have been The current initial strength of the festivals and the preservation of electrical system in order to either existing empowerment partners. amount for Indus Hospital’s system volunteered over the last two years, campus is 200 students with around heritage. During the last two years, enhance the quality of power or to enhancement was PKR 7.3 million. which brings the total so far, up to 100 students belonging to KE sponsorships and support were increase the system capacity to Indus Hospital - started off with a 153,000 hours. Our aim is to scale residential colony. provided to the National Academy of increase reach and coverage area. then current usage capacity of SIUT (Sindh Institute of Urology and up this programme by bringing on Performing Arts’ International Mostly investments in the systems 400KW. With KE’s empowerment Transplant) – catering to an annual board a panel of NGOs working for Usable furniture and other items Theatre Festival and the All are made to ensure fault free power and enhancement programme, Indus influx of over 1 million patients the betterment of the city and were donated to the Dar-ul-Banaat Pakistan Music Conference. supply to all strategic hospitals of Hospital was given an additional annually, SIUT requires a heavy load providing these options to our Fellowship School for Girls. Also, We have also been in constant the city or in order to support the 2.5MW enhancement and system to operate their dialysis units and employees in the form of a K-Electric Limited under its Social contact with the Heritage expansion of a specific strategic upgrade which increased the total kidney transplantation facilities. volunteering menu. facility. System enhancements have usage capacity to 2.9 MW which will The Primary Healthcare Unit and
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Impact 6 million Individuals Annually
Foundation and KMC to work Development was having invited as part of their study tour to Karachi, towards a trilateral mechanism Dr. Ishrat Hussain – Dean and Hyderabad and Thatta. Officers of where the focus will be to preserve Director (IBA) as the keynote various occupational groups belonging and uplift key heritage sites speaker. Champions from to federal and other government throughout the city. government and private institutions departments were among the were invited to attend the session. group. The aim of the visit was to The second session was based on provide capacity building and Thought Leadership the theme of ‘Social Entrepreneurship knowledge about critical issues and Platforms and its Impact on Sustainable policy making of the utility. The visitors KE’s aim with this programme is to Development’. Notable entrepreneurs gained first-hand knowledge about bring progressive minds together from across the board were invited issues of national importance and and promote enlightened thoughts to address the audience about the the contributions made by KE in the aimed at sustainable development. initiatives that brought a new energy sector. Youth Engagement facilitation partner. KE has entered together industry and academia To this end we have created meaning to the word sustainability. into a MoU for mutual knowledge with talent from Pakistan and abroad. platforms that facilitate the Speakers for the session were WAPDA and PEPCO Visit to 118 Platform sharing with NED. 1.8 million PKR Since the inception of the Youth spreading of intellectual opinions. Dr. Abdul Bari Khan-CEO (Indus Last year 24 high-ranking senior have been invested under this PAKATHON was initially Engagement Platform, 34 sessions Hospital), Mushtaq K. Chhapra- officers of Grade 18/19 drawn initiative to benefit both the launched in 3 cities namely, Thought Leadership Forum have been conducted in terms of Founder and Director (The Citizens’ from various formations of undergraduate and postgraduate Boston, Lahore and Islamabad technical visits and lectures, aimed to Using this platform we bring Foundation) and Dr. Adib Rizvi – Key WAPDA and PEPCO visited KE’s students of NED University in their where there were 250+ attendees impart real life, technical knowledge together all concerned stakeholders Note Address- Founder and Director state-of-the-art, 24-hour understanding of the real power for 30 different projects. of the course matter being studied at to discuss issues that are affecting (SIUT Pakistan). We will continue to functioning, 118 call centre. system by making models, running the technical universities. The our society and the economy, to create thought leadership forums The incharge at the call centre load-flows and simulating fault for KE was the only organisation that students gain insights of practical collectively work towards solutions on topics which are relevant to the highlighted the milestones their research studies. volunteered to allow use of actual implementation of the knowledge that will benefit Karachi and overall growth and prosperity of the city. achieved and presented the data for solutions, provided being taught at their institutions. Pakistan. The overriding theme of advancements deployed to NED Lab Creation challenges to these students Major institutions who have each forum has been to initiate National Institute of Management facilitate consumers calling to KE has pledged to develop a so that solutions for load-shed partnered with us on this platform sustainable and harmonized visit at KE Head Office file their grievances and complains. technical, testing lab at NED and theft could be sought. are NED, IBA, FAST, KSBL, SSUET, development. So far two events 15 officials belonging to the National The aim of the visit was to gain University for research and study Team with the best solution was Mehran University Nawabshah, have been held under this umbrella. Institute of Management firsthand knowledge about KE’s purposes. The KE exclusive lab will awarded the prize, which was PKR Mehran University Jamshoro, Bahria First one addressing the ‘Impact of progressing to their potential achievements and level of customer have state-of-the-art equipment 200,000 by K-Electric. University, and IoBM to name a few. Privatisation on Sustainable Grade-19 visited the KE Head office service delivered at excellence. that is required to understand the So far with this initiative and basics of electrical engineering Students from universities such as our various youth engagement equipment and their workings. IBA, IVS, FAST, Karachi University, platforms we have targeted Bahria, NED and Szabist took part over 8000 students. PAKATHON – Data Design and for the Karachi event where Connect – Competition companies and institutions such as PSSE Sponsorship KE participated in a unique K-Electric, Engro, Aman and Civil and PhD Facilitation challenge, under the advisement of Hospital provided operational KE recently invested in NED the MIT Enterprise Forum of challenges to these students so University’s PHD programme as a Pakistan. This forum aims to bring that solutions could be provided.
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Shared Impact – Sports
collaboration with Azm-e-Alishan in To achieve our vision, some show their potential, which will support of the victims of the Lyari initiatives were taken to develop a be live telecasted by the biggest bomb blast was also organized. football team on grass-roots and national sports channel, Geo Super, some are in the pipeline. in April 2015. (Approx) KE Football Future Objectives KE Lyari Football League KE Cricket League 2015 One of KE objectives is to be able to Lyari is the hub of football and KE Cricket league under-19 cricket produce players who can go on and keeping this in view KE is always teams from all 7 zones of Karachi take the Pakistan Football Team to eager to develop football for will participate in this league with qualify for the AFC qualifiers in five underprivileged children in Lyari. live telecast of final match on years and also substantially push With this spirit KE will be organizing leading sports channel of Pakistan. Pakistan up in the FIFA rankings. a platform for the youth of Lyari to
KE Sports department not only communities and build a strong collaboration with UNICEF and the manages our professional football positive association with them. Anti Narcotics Force in May 2014. and cricket teams, but also focuses Under this strategy the following KE worked with UNICEF and the on grass-roots development of initiatives were implemented to Anti-Narcotics Force to provide sports in the troubled areas of strengthen ties through sports: awareness to underprivileged Karachi. The aim is to divert children regarding the dangers of disenfranchised youth towards drug use and the importance of more positive outlets and increase KE and UNICEF immunisation for kids and other the national profile of sports. KE and UNICEF entered into an health related messages. agreement, with the pledge to KE believes that the best way to support our grass-root sports This tournament was organized for serve the society through sports is development initiatives and to the underprivileged youth of Lyari. to inspire the youth, especially the mutually increase awareness Twelve teams of under-16 footballers underprivileged youth, to adopt a regarding polio and preventive participated in this tournament. The healthy lifestyle focused on sports. diseases through tactical tournament was held at the People’s Creation of powerful platforms is communications — because Stadium Layri. 32 matches were played. critical as it does two things: allows ‘Karachi Deserves To Smile'. young and upcoming players to KE–Lyari 2010 League recognized display and harness their talents, KE Youth Football 11 underprivileged children who and provides us a communication were selected for the Pakistan U14 platform to engage the community Programme team, out of which 9 went on to In line with this, KE sponsored the especially crime inflicted, electricity represent the Pakistan team. KE Lyari Football League in theft prone underprivileged Night Street-Football Match in
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Harmonizing Environment
Frere Hall, Karachi Sustainability Report 2014
Green Management Framework
In 2013, KE launched its 5 year cumulative climate change framework to address critical challenges faced by one of the largest cities of the world, including the need for cleaner and more-efficient sources of energy, reduced emissions and emphasis on efficient energy usage advocacy. Since then, we’ve been focusing on fulfilling our commitments and KE has made significant progress in the commitments.
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Climate Change Policy Framework
Energy Efficiency and GHG Reduction KE has adopted a balanced and responsible approach, while carrying out its core business operations that reduces carbon emissions and ensures Open-to-combined cycle power projects at the existing plants in SITE and Korangi social and environmental gains. We aim to expand our current generation within the next 18-24 months which will increase the overall heat rate efficiency by 5% portfolio by 15 percent through renewable energy and various energy 1 to add 48.5 MW of output using the same quantity of natural gas. efficiency initiatives over the next five years to mitigate climate change and reduce our carbon footprint. Incentivizing Karachi-based industries using captive power (average efficiency 20%) to switch back to KE (average efficiency 45%) as the primary source of Renewable Energy Infrastructure 2 uninterrupted and reliable power. KE’s goal to enter and grow in the renewable energy space is driven by its goal to reduce dependence on fossil fuels, improve security of fuel supply, and reduce greenhouse gas emissions creating environmental benefits. The following projects will be added to our portfolio by 2018. Working with local and international strategic partners to introduce environmentally-friendlier imported Liquefied Natural Gas (LNG) into the fuel mix as a 3 replacement for imported high-sulfur furnace oil. 1 A Waste-to-Energy Project utilizing biodegradable matter.
Facilitating the revival of the 80 MW DHA cogeneration (power & water) plant in Karachi. Addition of 50-100 MW wind power to its overall generation mix by contracting 4 2 with IPPs to sell power to the KE grid under long-term off-take agreements. Transmission & Distribution (T&D) technical loss reduction package via Pakistan’s first Smart Grid project. The Smart Grid has a broad range of technologies that will spur the nation’s transition to a smarter, stronger, more efficient and reliable electric system. Off-grid solar powered projects in far flung areas within the KE franchise territory 5 3 (up to 10MW in aggregate).
Replacement of all our internal equipment containing CFC compound (air conditioners, refrigerators, water cooling machines, etc) with HFC-134a compound. Addition of up to 250 MW hydroelectric power to its overall generation mix via 6 4 long-term off-take agreements with private infrastructure developers. 7 Replacement of all old SF6 gas insulated breakers in our network.
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Energy Conservation
KE remains proactive in advocating and fostering responsible energy usage among our customers and employees. Environmental Compliance and Green Zone Development We propagate and facilitate energy efficient lifestyles among our customers. We also facilitate our industrial and commercial customers through consultation and advisory services to adopt energy efficient operations. We are We continue to mitigate our GHG emissions through creation of green zones. For day-to-day operational monitoring, actively pursuing the following: the following systems are being implemented:
Environment Management System (EMS) is fully compliant with ISO 14001 and the international Power factor improvement projects and free energy audit service for industrial and commercial customers. standard for environmental management.
Continuous emphasis on waste management improvement and waste generation is implemented Encouraging the usage of energy efficient appliances and adaptation of efficient energy systems and through an extensive programme. This significant effort focuses on no accidents, spills and/or timely building codes in collaboration with reputable manufacturers, architects and construction experts. reporting and mitigation of contamination arising from any of our operational activities.
Measures focusing on the usage of recycled water and its discharge after appropriate treatment Awareness creation for adaptation of energy efficient lifestyle specially targeted towards the youth. have been strictly implemented. State-of-the-art water recycling plants have been installed in BQPS-II and CCPP Korangi.
Active participation in the ADB-funded energy-saver national distribution programme. Cost sharing in the conversion of main municipal thoroughfare street lights and landmark monuments to LED and Studying and mitigating the impact of O/H transmission lines within KE’s network area. solar lights. Collaboration with USAID on the KWSB pumping station efficiency project.
Incentive programme for commercial markets to adopt Daylight Saving Programme by way of Plantation of 100,000 trees in Karachi as a CO2 sink. guaranteed uninterrupted power supply during their operating hours.
There is no ecologically protected area within the jurisdiction of all our business operations except two power plants that are located within 10 kilometers of protected mangrove forests. We stand committed to guard marine life and all ecologically protected areas.
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Climate Change Policy - Progress
Since the launch of Climate Change framework in 2013, KE has made significant progress on our commitments.
0101 0202 0303 0404
K-Electric has identified an opportunity KE has signed an MoU with Laraib In an effort to add nearly 50-100 MW of Signed two separate MoUs with Engro to pilot a 10 megawatt Waste-to-Energy Group (LG) to procure affordable power wind power, KE is exploring options with the objective of using LNG as fuel Power project within the vicinity of from 640 MW Azad Pattan project and with Burj Power and Luckytex. for new generation. Karachi by utilizing municipal waste 250 MW Ashkot hydropower project. deposited in landfill sites.
0505 0606 0707 0808
Open-to-combined cycle power Putting our city on the map Distribution of 2.7 million CFLs 51 Energy Audits conducted leading to projects at the existing plants in SITE by nominating Karachi for WWF's amongst domestic consumers under 5.6 MW of Optimized Load, 25.3m KWH and Korangi increase the overall heat Earth Hour City Challenge under KE's the GOP’s National CFL Programme of units saved, a saving of PKR 402.23m rate efficiency by 5% to add 48.5 MW of climate change policy. saving of approximately 107 MW. and a reduction in carbon emissions by output using the same quantity of 5,119.2 M tons. natural gas.
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Lowering Emissions
There were no spills or accidental releases of any pollutants during the period 2013-14 and no complaints or violation notices were received from any regulatory body of the land. No penalties or fines were incurred during the period. Fuel Switching accounts for all SF6 gas in its any regulatory body of the land. KE’s new generation plants and system, and also the amount of gas No penalties or fines were incurred expansion projects are primarily that has been lost to the during the period. based on a low-carbon solution – atmosphere. Status of the monthly natural gas. More investments in consumption and availability of the Third party monthly monitoring has sustainable projects based on gas is maintained. Regular feedback been carried out consistently and renewable energy sources, bio is taken from the grid management comprehensive monitoring reports fuels and liquid natural gas are to promote efficient use of the gas are generated which are sent to the being done. KE is working with local and control releases to the Sindh Environmental Protection Agency and international strategic partners atmosphere. Replacement of old (SEPA) for regulatory compliance. to introduce environmentally SF6 gas insulated breakers in KE’s friendlier imported Liquefied network is also planned. Environmental Systems measure: Natural Gas (LNG) into the fuel 2013-2014 Result mix as a replacement for imported Compliance Update Our environmental system high-sulfur furnace oil. KE is in complete compliance with measures records our emissions, the National Environmental Quality effluents, and solid waste. KE’s Standards (NEQS) of Pakistan monitoring results are in total SF6 Gas Monitoring particularly with respect to its compliance with National A comprehensive procedure for operations at generation plants. KE Environmental Quality Standards. Sulphur hexafluoride gas (SF6) gas has now registered itself in the Self Our improved performance has monitoring and management has Monitoring and Reporting Tool been widely recognized as the best been released for implementation (SMART) with the Environmental in Pakistan, to the extent that some across KE. This was essential for Protection Agency (EPA). There local distribution companies the effective management of SF6, a were no spills or accidental approach us for help with training Fully Fluorinated Compound (FFC) releases of any pollutants during the their staff and improving their which is recognized as the most period 2013-14 and no complaints or environmental systems. potent greenhouse gas. KE violation notices were received from
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Name of Unit/Site: Bin Qasim Thermal Power Plant 1 Name of Unit/Site: Bin Qasim Thermal Power Plant 2 Liquid Effluent Monitoring Liquid Effluent Monitoring Parameters Unit NEQS Sea Water Wastewater Parameters Unit NEQS Sea Water Wastewater TWW 1 2 3 1 2 3 01 Temperature ˚C 40=<3 40=<4 40=<5 28.75 30.25 01 Temperature ˚C 40=<3 40=<4 40=<5 29.75 31.00 29.42 02 pH value 6-9 6-9 6-9 7.18 7.39 02 pH value 6-9 6-9 6-9 7.17 7.13 6.69 03 BOD5 mg/l 80 250 80 69 37.33 03 BOD5 mg/l 80 250 80 63.33 60.00 6.00 04 COD mg/l 150 400 400 173.33 170 04 COD mg/l 150 400 400 160.00 150.00 13.00 05 Oil & Grease mg/l 10 10 10 0.025 0.025 05 Oil & Grease mg/l 10 10 10 0.03 0.03 0.03 06 Total Suspended Solids mg/l 200 400 200 7.58175 9.125 06 Total Suspended Solids mg/l 200 400 200 15.17 13.22 14.00
Gaseous Emission Monitoring Gaseous Emission Monitoring Fuel Used: F. Oil /N. Gas Fuel Used: N. Gas Parameters NEQS Turbine Parameters NEQS Turbine (mg/Nm3) 1 2 3 4 5 6 (mg/Nm3) 1 2 3 HRSG # 1 HRSG # 2 HRSG # 3 01 CO 800 125.15 35.58 Nil Nil 317.50 77.2 01 CO 800 3.0 4.89 3.22 3.5 6.67 5.84 02 NOx 400 314.07 222.25 Nil Nil 221.73 236.99 02 NOx 400 5.92 34.66 6.11 6.5 6 7.335 03 SO2 1700 1524.6 1191.21 Nil Nil 674.74 945.63 03 SO2 1700 BDL 1 1.00 Nil Nil Nil 04 Particulate Matter (PM) 300 60.9 83.16 Nil Nil 94.83 143.25 04 Particulate Matter (PM) 300 32.33 30 37.33 Nil Nil Nil
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Name of Unit/Site: Combined Cycle Power Plant Name of Unit/Site: STGTPS GEJanbacher Gas Engine 90 MW Liquid Effluent Monitoring Liquid Effluent Monitoring Gaseous Emission Monitoring Parameters Unit NEQS Sea Water Wastewater NEQS Waste NEQS Average Values 3 3 1 2 3 Unit 1 2 3 water Parameters (mg/Nm ) (mg/Nm ) 01 Temperature ˚C 40=<3 40=<4 40=<5 27.3275 28.335 01 Temperature ˚C 40=<3 40=<4 40=<5 30.58 CO 800 137.13 02 pH value 6-9 6-9 6-9 6.4075 6.57675 02 pH value 6-9 6-9 6-9 7.68 NOx 400 31.65
03 Oil & Grease mg/l 10 10 10 BDL BDL 03 Oil & Grease mg/l 10 10 10 37.00 SO2 1700 BDL 04 Total Suspended Solids mg/l 200 400 200 11.7475 16.085 04 Total Suspended Solids mg/l 200 400 200 116.24 Particulate 300 43.30 Matter (PM) Gaseous Emission Monitoring Noise Monitoring Fuel Used: Natural Gas Noise monitoring around the plant boundaries is a regular feature of our activities as well and data is being maintained Parameters NEQS Turbine and analyzed quarterly. We are in complete compliance with the national and international guidelines in this respect. (mg/Nm3) 1 2 3 4 01 CO 800 61.165 16.75 40.67 19.92 Locations NEQS Average (dB) 02 NOx 400 43.665 41 59.96 14.25 BQPS-I 75 58 03 SO2 1700 Nil Nil BDL Nil BQPS-II 75 65 04 Particulate Matter (PM) 300 Nil Nil 13.33 Nil KCCPP 75 64 KTGTPS 75 71 SGTPS 75 63 Name of Unit/Site: KTGTPS GEJanbacher Gas Engine 90 MW Liquid Effluent Monitoring Gaseous Emission Monitoring NEQS Waste NEQS Average Values 3 3 Parameters Unit 1 2 3 Water Parameters (mg/Nm ) (mg/Nm ) 01 Temperature ˚C 40=<3 40=<4 40=<5 30.58 CO 800 216.89 02 pH value 6-9 6-9 6-9 7.68 NOx 400 61.30
03 Oil & Grease mg/l 10 10 10 37.00 SO2 1700 23.56 04 Total Suspended Solids mg/l 200 400 200 116.24 Particulate 300 67.18 Matter (PM)
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Environmental Protection Expenditures Apart from fuel, water is also used as a major raw material for generation. The following table gives details of water consumption and the source: Projects Cost (PKR) Cost (USD) Environmental Studies of Eleven (11) Projects 6,225,000 62,250 Station Water Type Source Impact Rate In: Drainage Recycled Environmental Monitoring of Power Plants 2,635,000 26,350 on source um/h PCB Monitoring of Grid Stations 1,025,000 10,250 Sewerage Sea Atmosphere Asbestos Monitoring at Power Plants 285,000 2,850 BQPS-I Raw Water KWSB/PASMIC Low 221 221 76 48 0 Total 10,170,000 101,700 Sea – Low 139248 139248 139248 – – BQPS-II Raw Water – – – – – – Material Usage Sea Port Qasim Low 47,225.94 47,225.94 47,218 0 0 Gas and furnace oil are the main raw materials used for electricity generation. The following table gives the total fuel usage KCCPP Raw Water KWSB/PASMIC Low 3.6 3.6 0 0 0 with costs, including the cost of electricity bought from Independent Power Producers (IPP) for the last 2 years. On average Sea – Low 9800 9800 9800 0 0 85 % of the material used comprises of fuel. KGTPS Raw Water Tanker Low 0.82 0.82 0.00 0.20 0.00 Sea – – – – – - Year Gas Furnace oil SGTPS Raw Water Tanker Low 0.546 0.546 – 0.082 0.00 Quantity Energy Quantity Energy [Tera Joules Total Fuel Sea – – – – – – (MMCFD) (MMJ) Cost (Rs) (MTONS) (1*10^12 joules)] Cost (Rs) Cost (Rs) F Y-12-13 164 172,956,860 29,336,016,891 587,276 30,168,050,580 38,471,826,599 67,807,843,490 Material Transportation F Y-13-14 168 177,175,320 31,552,581,191 497,424 25,552,401,923 32,783,357,000 64,335,938,191 Our final product electricity is transported through HT and LT cables from the plant to the grid and then through transformers & PMTs to millions of residential and commercial units. The final product is not exposed environmentally and thus has no impact during transmission and distribution. Our main fuels, furnace oil and gas, are transported by their Total Expenses KE Fuel Cost as % Total cost of Fuel respective suppliers though pipelines from the source to our plants, having negligible environmental exposure. Year (incl. IPPs & General Overheads) of Total Expenses (incl. IPPs) as % of Total Expenses F Y-12-13 171,036,964,457 39.65% 85.47% F Y-13-14 173,858,015,529 37.00% 84.73%
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Waste Management managing their respective facility assess its performance. The Solid Waste Management waste through segregation at source environment monitoring department A corporate procedure was established with an emphasis on reuse and also gives recommendations and and implemented through an extensive recycling. The remaining is does cross-checking at different training programme. This significant sent to inventory management for intervals on the control of oil and effort has resulted in no accidents, ultimate disposal. EPA certified chemical spillages, monitoring of spills or reports of contamination contractors have been appointed in domestic effluents, placement of arising from any of our activities. order to handle, transport and dispose drain covers and water conservation hazardous waste. This is in compliance measures in order to remain within Continuous emphasis is being given on with Hazardous Substance Rules 2003 NEQS limits and protect the waste management improvement with and in line with the corporate environment. State-of-the-art water special emphasis on reduction of various procedure for waste management. recycling plants have been installed in types of waste being generated by the BQPS1 and CCPP Korangi Plant. organisation in its different business Wastewater Management Reports on effluent discharge are units and divisions. These include Neutralisation treatment is carried sent to Pakistan and Sindh non-hazardous waste made up of out to process the effluence before Environmental Protection Agency on wood, paper, scrap iron, copper final discharge to the sea. It is ensured quarterly basis under SMART for all conductor, aluminium conductor, that the water leaving the wastewater generation plants. tyres and tubes, scrap cables, treatment plant is free of pollutants energy meters, and hazardous and complies with NEQS restrictions EPA certified contractors have been waste, including used oils and to protect marine habitat and appointed in order to handle, transport batteries. Waste transition yards maintain the natural ecosystem. and dispose hazardous waste. This is in are established in each business unit compliance with Hazardous Substance to ensure effective waste Regular testing of neutralisation Rules 2003 and in line with corporate management. All business units are basins is carried out in order to procedure for waste management.
Details of Disposed Solid Waste 2013/2014 Locations NEQS Scrap power transformers 420 Nos Old vehicles 110 Nos Scrap meters 520 M/Tons Scrap copper conductor/wire 732 Tons Scrap aluminum cable 280 Tons Scrap aluminum conductor 158 Tons Used tyres 350 Nos Used tubes 650 Nos Scrap iron 1410 Tons Scrap batteries/cells 1961 Nos Used oil 121,000 Ltr Scrap plastic drums 210 Nos Scrap wood 340 Tons Scrap empty steel drums 780 Nos Scrap copper cable 70 Tons Scrap waste paper 55 Tons Scrap 132 KVA air circuit breaker –
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Energy Efficiency Initiatives
Impact in Numbers and Figures In the last few years emphasis has been on interactive sensitisation of the masses through various events and activities. We have engaged students, corporate entities and the masses through participation in key strategic events, student interactive sessions and mall interceptions. Last year we also executed a 360 degree media Approximately 2.6 million consumers sensitized campaign “Switch Off Karo” that was supplemented by a digital media campaign 01 over the last three years. named ipower Karachi.
In a country where the energy strategic events, student interactive targeting different stakeholder sets shortfall has been increasing sessions and mall interceptions. with sensitisation campaigns that alarmingly, KE and Karachi have focus equally on guiding them in become the standard for the rest of Last year we also executed a 360 making the necessary investments in 51 Energy audits conducted leading to 5.6MW of optimized the region to follow with more than degree media campaign “Switch Off energy efficient technology and load, 25.3m kWh of units saved, a saving of PKR 402.23m half of the city having access to Karo” that was supplemented by a alterations in their lifestyles. 02 uninterrupted supply. This is possible, digital media campaign named and a reduction in carbon emissions by 5,119.2m tons. in part, due to the various successful ipower Karachi. The idea is to scale up the impact initiatives taken to promote and of these initiatives in the future by inculcate energy efficiency. KE offers energy audits to various approaching more high-consumption organisations, manufacturing entities where the biggest difference Our motto has been: ‘A MW saved concerns and businesses to suggest can be made, while increasing focus is a MW generated’, a message or improvements which contribute to on inculcating the responsible values 269MVA capacity margin released through value that has been inculcated in the power factor improvement and of energy conservation into the youth public through careful interventions energy efficiency. We are actively as a long-term approach. 03 power factor improvement. to ensure sustainability in the energy sector, and contribute towards the protection of scarce natural resources.
The reduction in demand as a result of KE’s energy conservation and Distribution of 2.7 million CFLs amongst domestic efficiency programmes are slowly, but surely, adding to the company’s 04 consumers under the GOP’s National CFL profitability, ensuring smoother Programme, saving approximately 107 MW. technical operations due to the subsequent unburdening of our electricity network, while contributing positively to the country’s energy shortfall and the environment.
In the last few years emphasis has 5,000 trees planted. been on interactive sensitisation of 05 the masses through various events and activities. We have engaged students, corporate entities and the masses through participation in key
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WWF – The Earth Hour City Challenge 2016 for KARACHI CITY 1st KE is the first corporate entity to enter Karachi in the WWF city challenge Corporate Entity to Enter Karachi against its Climate Change policy 2016 year challenge. An MoU has been in the WWF City Challenge signed between WWF and KE to collaborate activities for the City Challenge. The WWF Earth Hour City Challenge has been created to mobilize action 163 Cities and support from cities in the global transition towards a climate friendly one-planet future. The challenge invites cities to submit inspiring and Participated in the credible urban development plans that dramatically increase the city’s Earth Hour City Challenge use of renewable energy.
In this year, that is 2014-15, 163 cities in the following seventeen countries 20,000 are participating in the Earth Hour City Challenge: Brazil, Canada, Colombia, Pledged Plantation of Mangroves by KE Finland, France, India, Indonesia, Malaysia, Mexico, Republic of Korea, South Africa, Singapore, Spain, Sweden, Tanzania, Thailand and USA.
KE has pledged plantation of 20,000 mangroves for Karachi as a kick off initiative for the challenge in partnership with WWF. Through a structured Climate Change Policy, KE has resolved along with WWF to put Karachi on the climate change map.
124 Sustainability Report 2014 Harmonizing Stakeholder Management
Hindu Gymkhana, Karachi Sustainability Report 2014
An Engaged Business
Our stakeholders are our partners in progress. Constant engagement with them helps us improve the way we do business as we become more aware of our impact on their lives, their communities, and the environment.
They keep us focused on our goal of the government. Taking care to match providing clean, reliable power and the appropriate communication ensuring full compliance with all laws channel with each group, K-Electric and regulations that govern us. carefully considers each piece of feedback from stakeholders, K-Electric pursues open, and makes every effort to reflect relationship-driven communication lessons from the feedback in the with stakeholders in order to promote company’s future corporate shared growth. K-Electric’s diversity policies and actions. In order to of stakeholders includes shareholders, facilitate effective communication customers, industry, employees, with stakeholders, K-Electric has NGOs, local communities, suppliers, designated specific departments mass media, regulatory bodies and for various stakeholder groups.
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Stakeholder Universe
K-Electric uses an array of communication. The company hosts platforms. This is an effort to communication channels to inform public stakeholder forums and encourage stakeholders to express Media is one of the most critical stakeholders and we believe that it has and engage stakeholders through maintains a strong presence on the their honest point of view on any played a key role in raising relevant issues and lobbying for the desired productive and relationship-driven social media through interactive matter related to the organisation. solutions related to the energy sector.
Industries and Trade issues revolving around it. Employee Engagement Media is one of the most critical Residential, Industrial and Commercial Customer Associations Regular, open and interactive stakeholders and we believe that it communication with the employees Our regional heads and CEO has played a key role in raising is given due importance with the secretariat are in direct dialogue relevant issues and lobbying for the organization and many platforms with all key trade associations and Suppliers desired solutions related to the have been created for employee industries in order to keep them energy sector. facilitation and interaction with the informed about the real time management. Regular recreational challenges and problems faced by The Media & PR team has continued events are also organized for informal KE. They are engaged through Financial Institutions and Stock Exchanges to hold interactive dialogues with interaction and team bonding. various trade association platforms media and over the last two years on various power sector issues like has managed to place KE’s voice AZM, our monthly internal Urdu fuel shortages, energy efficiency 2,655 times in the form of News newsletter, helps unite our Regulatory Bodies and tariff hikes, etc. Their advice is Tickers, News Headlines, News community of over 10,000 solicited in advance for any issue Reports, Talk Shows, Beepers and employees by keeping them that will have an effect on their Interviews. This voice has been abreast of recent activities and performance. NGO’s and Local Communities raised time and time again on 14 developments taking place within prominent news channels working in the organisation. AZM also focuses Government and the country along with the on showcasing the achievements Regulatory Bodies international media as well. Around of our personnel, acting as an Employees KE management and leadership 220 press releases and around 180 effective motivational and are engaged in an on-going dialogue rebuttals to media on various issues employee engagement catalyst. with all key stakeholders, be it has been released over this period. Shareholders and Board of Directors ministries, regulatory bodies, power KE intranet has been created to sector players or key suppliers. This Shareholders keep employees updated with the on-going interaction has emerged Annual and quarterly financial most recent activities taking place as a mutual partnership to focus on reports are printed regularly for the within the organisation, along with Media critical policy issues of the overall shareholders and overall facilitation to access all major power sector. stakeholder universe. Sustainability document templates and apply for IT, Report is another initiative to report HR-oriented and Administrative requests online. Government and Ministries Media in detail the economic, social and We maintain an open, proactive, environmental impact of the Inter-departmental Cricket accessible and transparent organisation. AGM is held annually. tournaments are organized relationship with media. KE has Investor Relations (IR) meetings are biannually. Employees from all levels played a critical role to educate also a regular feature. The website Political Parties including CEO and top brass of KE media on different micro and macro also provides updated information to participate in these tournaments. aspects of the power crisis and the shareholders and investors.
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It becomes a big celebration amid through 360 degree campaigns on accomplished on our centennial was friendly competition and casual fun. 116,000 major consumer centric issues. remarkable. FB Followers (Launched in Jan 2014) Volunteer initiatives such as Blood Social Media Other Major Campaigns Donation Camps are organized Advertisement campaigns of varying We started our online presence regularly at various KE locations. natures were launched across all through Twitter which became a first K-Electric has been recognized as electronic and print mediums to in the utility sector in Pakistan. a major blood donor, in a ceremony 16,800 increase consumer awareness Provision of real time information to held to celebrate World Blood Donor Twitter Followers regarding key issues and initiatives consumers was a novelty, which the Day, celebrated under the auspices such as energy conservation and KE consumer never experienced. of World Health Organisation. AZM Sukuk campaigns. After a successful run on Twitter, KE
decided to establish a presence over Family Gala – The Biggest Corporate 42,000 By offering the highest rates of Facebook given that it was the most Family Get Together in Pakistan. return and flexible tenor options Tweets active social media platform in As part of the KE’s Centennial through a very thorough media mix Pakistan. Then onwards, instead of Celebrations an all inclusive, free for comprising an engaging radio spot, only using the presence for customer all and one of its kind KE-Family Fun print ads, building wraps, on social complaints, efforts were made to Gala was organized. The programme media and its own website, all three 12,800 perform outbound release of information was aimed at the entire KE universe, tenor options of the AZM TFC were LinkedIn Connections alongside facilitating customer employees and their families. subscribed within the first five complaints, News was primarily sent weeks of the launch — a record out to those following us on, Twitter Meticulous planning and execution breaking time frame in Pakistan. and Facebook, and LinkedIn was included custom invitations for every used for sending out corporate news. employee along with their family IPOWERKHI members. The two-day event Facebook: 116,000 followers Unfortunately, as a nation, energy attracted approximately 36,000 people (launched in Jan 2014) conservation is probably not even comprising of only employees and Twitter: Tweets 42,000 amongst the top five on the list of their families. Entertainment shows, Twitter Followers: 16,800 our priorities. Therefore, rolling fun games and free food for all LinkedIn: 12,800 out basic energy conservation tips including mega lucky draws were could not cut through the noise highlights of the gala. This was the and our consumers wouldn't be very first time that the entire Brand Marketing able to relate to it the way they leadership was present at any casual The Rebrand would to an audience-specific occasion with all the employees. The In the fiscal year FY13-14, following campaign. Hence, keeping the event was closed, both the days, with the company’s centennial psychographics in view, the a display of fireworks to remember celebrations, there was a successful audience was split into eight for a lifetime. implementation of a corporate segments which include Kids rebrand with a change of identity (seven years and above), from the Karachi Electric Supply Housewives (savings for Customers Company to K-Electric to highlight Using a multi-pronged approach, we shopping), CEO (even if you can the successful transformation of the seek to engage our consumers afford it doesn’t mean you waste company and proclaim the through various media platforms it), industry for laborers or small management’s desire to start afresh. since the past few years the school or health clinic for the The list of milestones achieved in the emphasis has been on the creation underprivileged (switch off to last five years is very extensive and of interactive platforms through a switch on), Shopkeepers (save fortunately the ‘point of arrival’ being strong presence on social media and power and increase your profit).
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new connection status, the website’s Customer Feedback trackers. The total sample is equally facelift will bring it closer to the best KE undertakes brand health tracking divided among SEC A, B, C, D and E. As industry practices in digital studies on an annual basis through per Wave 7, we have shown an communication. This will which we calculate brand equity index increase in all Company substantially improve the customer and satisfaction index, which is the image-selected attributes, also with experience and create true value by output to total brand experience. anti theft, customer service and billing. providing an added transparent, uniform A total of 74 selected perception The eighth wave of the consumer service for consumers. attributes are present in these brand tracker was conducted in Jan 15.
Company Image
Key Perception Indicators Oct ‘09 Feb ‘10 Aug ‘10 Dec ‘10 Dec ’11 Dec ‘12 Dec ’13-14 Jan ’15 Change +/-
Is a caring company 2% 11% 18% 12% 28% 13% 25% 57% 32%
UMEED, K-Electric’s external electronic newsletter Is a trustworthy company 3% 6% 18% 16% 28% 9% 30% 61% 31% reaches around 900,000 stakeholders via email on a quarterly basis, and serves as the face of the Is a socially responsible company 6% 9% 13% 17% 26% 12% 31% 61% 30% organisation to all external stakeholders. I will give KE a chance 24% 31% 25% 46% 63% 39% 61% 84% 23% to improve things in karachi Each thematic was hammered In future, KE’s website will also be through the following media mix: further enhanced in alignment with KE is a contemporary/modern 15% 19% 16% 29% 31% 19% 48% 82% 34% TV, Radio, Outdoor, Wraps (KE the company’s vision of continuing to up-to-date company Sites), Bill Ads. become a consumer-centric company. I would like to work for KE 10% 14% 22% 14% 26% 32% 37% 50% 13% Website The project involves an integration 17% 33% 41% 35% 48% 55% 73% 84% 11% As part of digital communication, of KE’s back-end systems into the KE is being run by a management which a complete revamp of the official website’s skeleton, along with the knows what they are doing website – kesc.com.pk to ke.com.pk development of exclusive portals for – was successfully launched as part of customer and corporate care. By technical and billing complaints, Is concerned for the well-being of Karachi 5% 12% 21% 19% 23% 18% 28% 48% 20% the rebrand initiative. allowing consumers to lodge view their billing history, and track
134 Sustainability Report 2014 Disclosure on Stakeholders Engagement by Type and Frequency
Stakeholder Group Type of Engagement Frequency of Engagement 2013-14 Professional Bodies Meetings on various issues/ Federal & Provincial Ministries Policy meetings and written Ongoing on day-to-day basis/regular Written Communications communications on various issues participation in all conferences and meetings held. Foreign Missions Meetings with strategic As per scheduled visits. leadership level Regulatory Bodies (NEPRA - SECP) NEPRA-Meetings for tariff/meeting Bimonthly/Monthly for customer compliant meetings/Annual performance BOD/Investors BOD meetings/KES Power meetings Quarterly/Annual resolution/Annual Report. report/SECP updates and Quarterly SECP–Compliance related reports, meetings on organisational Industry/Commerce/Trade Corporate Advisory Panels/ Written Ongoing written/verbal communication Quarterly reports, Annual reports performance and compliance. Associations Communications/Meetings /12 Structured Advisory Panels on and Sustainability Report strategic leadership level. Federal & Provincial Governments Meetings and written Ongoing on day-to-day communications on various basis/monthly environmental Industrial & Commercial Corporate Advisors/Written Ongoing written-verbal issues/SMART Programme report SMART report. Customers Communications/Meetings communication/Meetings with strategic leadership level as per need. Stock Exchange Financial reports Annual/Half yearly and Quarterly financial reports. Key Suppliers & Service Providers Meetings on various issues/Written Ongoing on day-to-day basis Communications Environmental Enforcement Bodies SMART Report Monthly
Media Press Releases Financial Institutions/Partners Annual Performance Reporting to Annual Reports/Ongoing written Press Conferences IFC/ADB and other financial partners communication/Meetings
NGOs Meetings on various Ongoing Technology Partners Meetings on various issues/Written Ongoing on day-to-day basis. issues/Written Communications/ Communications. Umeed/Emails/SMS Customers Khuli Katcheri (Open forums with 18 forums - 4,500 customers directly Consumer Groups Meetings on various Ongoing the customers to resolve customer served by the leadership team. issues/Written Communications/ complains and queries) Umeed/Emails/SMS SMS 28 million Social Action Groups Meetings on various Ongoing issues/Written Communications/ Emails 7 million Umeed/Emails/SMS Electronic Programmes Tickers Opinion Leaders Umeed (Newsletters) Emails/SMS Monthly newsletter/bimonthly (News ticker updates) /Thought Leadership Forum thought leadership forum/emails - SMS as per need Electronic appearance in various Appearances/0 beepers Educational Institutions Youth Engagement Interactive forum 350 programmes/News beepers
Educational visits to Plants 39 Website Tweets/Followers
Sponsorship of various 16 Print Ads in the newspapers/ 9,897 Spots educational events Radio and TV spots Strategic Business Partners Meetings on various issues/ Ongoing on day-to-day basis Written Communications Community Community Meetings 23 Panel Meetings
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