Ten domestic and international investors expressed interest on Monday in acquiring a controlling stake in Islamabad Electric Supply Co. (IESCO), the Privatisation Commission said.
The expressions of interest mark a new phase in Pakistan's IESCO privatization, part of a wider push to improve the financial and operational performance of the power distribution sector.
What stake in IESCO are investors seeking?
The investors are seeking between 51% and 100% of IESCO's shares along with management control. The expressions of interest are the first major step towards the planned transfer of the state-owned utility to private management. The commission will now assess the expressions of interest and Statements of Qualification against approved prequalification criteria.
Pakistan's power distribution sector has long faced high distribution losses, weak bill recoveries and financial pressures.
Which companies have expressed interest in IESCO?
Three Turkish energy companies submitted expressions of interest: Aktor Elektrik Enerji Yatırımları San. ve Tic. A.Ş., Genvera Enerji A.Ş. and Cengiz Enerji Sanayii ve Ticaret A.Ş. Pakistani companies expressing interest included Engro Energy Ltd., Sapphire Fibers Ltd., Novatex Ltd. and Bestway Cement Ltd.
Consortia also submitted expressions of interest. One is led by Artistic Milliners and includes Lake City Holdings, Fatima Capital Ltd., Din Ventures (Pvt.) Ltd. and Fazal Cloth Mills Ltd. Another is led by Hub Power Holding Ltd. and includes Lucky Cement Ltd., Kohat Cement Ltd. and Metro Ventures (Pvt.) Ltd.
A third consortium is led by Hasnaat Brothers Construction Co. (Pvt.) Ltd. and includes Dhilal Holding Group, Pak Steel, Bio-Labs (Pvt.) Ltd. and Farid Steel Casting (Pvt.) Ltd. The Privatisation Commission said the participation of Turkish investors and major Pakistani business groups reflected continued interest in the transaction following investor roadshows in Pakistan and abroad.
What happens next in the IESCO privatisation?
Applicants that meet the requirements will be prequalified and invited to the next stage. They will then gain access to a virtual data room for detailed due diligence.
"This is an important milestone in the privatization of DISCOs," said Muhammad Ali, adviser to the prime minister on privatisation and chairman of the Privatisation Commission, in a statement. He said the response to the IESCO transaction demonstrated investor interest in Pakistan's electricity distribution sector and the government's commitment to a transparent and competitive process.
According to the commission, the government aims to improve operational efficiency, modernise distribution infrastructure, strengthen customer services and reduce distribution losses through the transaction. The reforms are also intended to support a more financially sustainable electricity sector and improve the reliability and affordability of power supplies over time.
Which other power distributors are being privatised?
IESCO is one of three distribution companies in the first phase of the government's DISCO privatisation programme. The other two are Faisalabad Electric Supply Co. (FESCO) and Gujranwala Electric Power Co. (GEPCO).
The commission said 10 parties had already been prequalified for FESCO, while 11 expressions of interest had been received for GEPCO and were being evaluated.
Pakistan has been pursuing privatization and structural reforms in the power distribution sector as persistent losses, weak collections and financial constraints have weighed on the wider electricity industry. The commission said it remained committed to an open, transparent and competitive process as part of the federal government's broader power-sector reform agenda.
Comments
See what people are discussing