KESC's 2002 multi-year tariff determination: lessons for Pakistan and South Asia

In preparation for privatization of the KESC (Karachi Electricity Supply Company), a state–owned vertically integrated electricity utility in Pakistan, the company requested that the regulatory body NEPRA (National Electric Power Regulatory Authority) grant a MYT (multi–year tariff). The new regulatory framework was proposed to assure the prospective investor would be allowed a reasonable period to recover the losses of the initial years of privatization before the base tariff is adjusted through a review. Thus permitting a much smaller initial price increase than would have been necessary if an MYT framework were not established.