KARACHI: In a major blow to Pakistan’s power sector, Shanghai Electric Power (SEP) has officially terminated its $1.77 billion agreement to acquire a majority stake in K-Electric (KE).
Shanghai Electric ends $1.77bn deal to acquire 66.4% stake in KE.
Company cites unmet conditions and changing business environment.
Analysts see setback for foreign investment in Pakistan’s energy sector.
The Chinese firm announced the decision in a notice to the Shanghai Stock Exchange, confirming that it would no longer proceed with the purchase of over 18.3 billion shares in KE, representing 66.4% of the company’s total issued share capital.
SEP stated that the deal was dropped after KES Power Ltd., the seller, failed to meet the closing preconditions. The company also cited changes in Pakistan’s business climate, which it said no longer aligned with its global expansion strategy.
In a key development for Pakistan’s energy sector, Shanghai Electric Power (SEP) has terminated its purchase of 18,335,542,678 shares in K-Electric (KE), a Pakistani utility company, for $1.77 billion.https://t.co/MEtTIBFBuR#brecordernews pic.twitter.com/6MgCD7S2ZK
— Business Recorder (@brecordernews) September 10, 2025
The acquisition plan had been in the works for several years, with SEP initially committing to pay $1.77bn along with performance-based incentives of up to $27 million. However, despite repeated extensions, the transaction failed to close.
SEP clarified that ending the deal would not negatively affect its own operations or financial stability. The decision was approved in a board meeting held on September 9, 2025.
Industry experts say the cancellation highlights challenges faced by foreign investors in Pakistan’s energy sector, particularly in regulatory approvals and market conditions.
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