General view of the K-Electric's Power Plant located in Bin Qasim on the outskirts of Karachi. Photo: Reuters

Shanghai Electric Power Co.  will buy a majority stake in Pakistan’s K-Electric for US$1.77 billion in the biggest acquisition in the country for a decade in a sign of China’s growing interest in the South Asian nation as part of  its “One Belt, One Road” initiative.

K-Electric is Pakistan’s biggest electricity company, supplying power to 2.5 million customers in and around Karachi, the country’s biggest and wealthiest city. Abraaj Group, a Dubai-based private equity fund, is selling the stake.

SEP was among a number of Chinese bidders, including China Southern Power Grid, which were lining up to acquire the stake, Reuters reported in August, citing sources.

Chinese companies’ interest comes after China last year announced energy and infrastructure projects worth US$46 billion in Pakistan, with a view to opening a trade corridor linking western China with the Arabian Sea.

“SEP will leverage its own strengths as a strategic investor and further realize K-Electric’s potential to provide better services to the people of Pakistan and the government of Pakistan,” Shanghai Electric Chairman Wang Yundan said in the statement.

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