Karachi Electric Supply Corporation: Garbage to Electricity

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The project garbage to electricity is aimed at contributing to the shortage of electricity in Karachi. Although there are many suppliers there is only one monopolist distributor in the industry namely KESC (Karachi electric supply corporation). There are various power generators who use traditional methods of generating electricity i.e. through water; coal oil etc but there has not been any generator of electricity through garbage. Therefore, with the idea of producing low cost and profitable electricity we, the promoters have made this business plan. The raw material being garbage and output being electricity not only contributes to the ailing situation of power crisis but also is most cost effective among other power generation processes which do not only use high cost raw material but also face shortage in acquiring it. After getting the project approved from the government, we plan to sign a contract with KESC to supply them generated power and register the name of the company. License to import plant from foreign sources will be obtained as we intend to acquire garbage to electricity plant through a closed tender process. In order to acquire raw material a contract with city district government, cantonment boards and Karachi Municipal Corporation will be singed for procurement on a daily basis. However the company will also have its procurement team and vehicles for collection of garbage for which permission and licenses will be sought. The process of conversion will be carried out on the location decided to be “Manghopir”. We will purchase the land at Manghopir. The plant will be set up there and warehouses for raw material storage will be installed. The process also requires indirect material auxiliary fuel which we have decided to use as rice husk which will be acquired through different rice mills in Karachi and other cities of Pakistan. The process of conversion from garbage to electricity comprises of nine steps which have been discussed further. We intend to keep the company a Private limited company. The board of directors will comprise of entrepreneurs as well as investors with distributed rights. The company will comprise of six departments namely procurement, plant operation, human resource, public relations, finance and accounts. The total budget proposed for this project is Seventy seven Crores and thirty five lacs (7.735 billion Rupees).The budget mainly compromised of the fixed costs of plant, land, building and office equipments. We have forecasted that we will achieve breakeven in the third year of the commencement of business with a selling price of 3.75 per kilo watt which is far lesser than our competitors, providing us the competitive edge over other players in the power generation industry.


The industry in which we intend to operate is the electricity industry of Karachi. There is only one player or supplier of electricity in Karachi namely Karachi Electric Supply Corporation. There are various generators of electricity such as Kanupp, Wapda, Korangi thermal power plant, Bin Qasim power plant etc. There are around 3 IPP’S (independent power producers) that supply electricity to KESC. The overall power supply demand of the city ranges around 2,300MW. Karachi Electric Supply Company (KESC) faces a severe electricity shortage of over 600 Megawatts (MW). Due to this shortage of supply the city faces severe load shedding, two to three times a day regularly and even more during the summer season when consumption is high. Around 1,960 MWs electric supply is available to the KESC through its indigenous and outside power generation sources. The eight generation units of Bin Qasim Thermal Power Station of the KESC churn out 820 MWs electricity. The privatized power utility, through its resources, produces 1,066MWs electricity. The Wapda supplies 700 MWs power supply while various independent power producers (IPPs) give 250 MWs to the KESC. KESC takes 150MW from...
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