KARACHI – The Abraaj Group on Sunday announced that a $1.77 billion stake in K-Electric will be sold to China’s state-backed Shanghai Electric Power (SEP).

The transaction is the largest M&A deal in Pakistan in a decade, and comes at a time of heightened Chinese interest in investing in the South Asian nation as part of its “One Belt, One Road” initiative.

Abraaj-controlled KES Power will divest the 66.4 percent stake subject to regulatory approvals being obtained.

The Abraaj Group has entered into “a definitive agreement to divest its stake in K-Electric to Shanghai Power Company for $1.77bn,” said a press release issued by the Abraaj Group.

Chairman of SEP Wang Yundan said, “SEP appreciates what Abraaj has achieved at K-Electric over the past seven years and recognises the performance and capability of K-Electric’s management team.”

“SEP will leverage its own strengths as a strategic investor and further realise K-Electric’s potential to provide better services to the people of Pakistan and the Government of Pakistan. SEP is confident about working together with Abraaj in the future to transform K-Electric into one of the best companies in Pakistan.”