Pakistan to seek buyers for loss-making power companies in Jan

Pakistan plans to issue expressions of interest in January for the privatization of several state-owned power distribution companies, a senior official said Friday, with authorities expecting investors from Turkey to take part.

Privatization Adviser Muhammad Ali said the government is finalizing restructuring and transaction plans for the distribution companies, known as DISCOs, which have long struggled with poor recoveries, political interference and corruption.

The move is part of efforts to reform loss-making state enterprises under a $7 billion International Monetary Fund program.

“We are publishing the EoIs for investors in January,” Ali, who also chairs the Privatization Commission, told Nukta. “Right now, we are finalizing their restructuring plan and transaction structure.”

Prime Minister Shehbaz Sharif’s government aims to privatize three DISCOs in the first phase: the Islamabad Electric Supply Company, Faisalabad Electric Supply Company and Gujranwala Electric Power Company.

Finance Minister Muhammad Aurangzeb has said that nearly 90 percent of DISCO boards are now chaired by private-sector professionals to improve governance and boost recoveries.

In a second phase, the government plans to divest stakes in the Hyderabad Electric Supply Company and Sukkur Electric Power Company. Last month, the Privatization Commission appointed Raiffeisen Investment as financial adviser for those transactions.

Pakistan, which owns most of the national power infrastructure, is facing mounting “circular debt,” or accumulated unpaid bills and subsidies, that has strained the power sector and pushed up fiscal pressures.

The crisis has disrupted electricity supply, discouraged investment and become a central issue in economic reform discussions with the IMF.

Officials familiar with the process said the government expects strong interest from Turkey. Local media earlier reported that Pakistan had invited experienced international operators, particularly Turkish firms, to participate in the privatization.

“Türkiye is a model of successful private-sector participation in power distribution companies,” one official told Nukta on condition of anonymity, saying Turkish companies are expected to show interest.

Another official noted that Raiffeisen Investment Finansal Danışmanlık Hizmetleri Limited Şirketi, which signed a financial advisory agreement with Pakistan on November 27, is based in Turkey. Members of a Turkish delegation also met Pakistani officials at the Power Division in recent weeks.

“As far as DISCOs are concerned, the work on them will start in the first quarter of next year,” the official said.