Pakistan moves ahead with first phase of power distributor privatization

Pakistan's Privatization Commission Board on Tuesday recommended that the Cabinet Committee on Privatisation approve restructuring plans for the first phase of the government's power distributor privatization program.

The phase covers Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO). The recommendation came during a meeting chaired by Muhammad Ali, adviser to the prime minister on privatization and chairman of the Privatization Commission.

What is Pakistan's first phase of DISCO privatization?

The first phase of Pakistan's power distributor privatization covers three utilities: FESCO, GEPCO and IESCO.

The Privatization Commission Board has recommended restructuring plans and schemes of arrangement for these companies, based on audited financial statements for the period ended March 31, 2026, to the Cabinet Committee on Privatization for approval.

How will the restructuring work?

The commission said the proposed framework is designed to maximize value for the government while keeping the transactions commercially viable and attractive to local and international investors. Under the structure, the government will establish a Special Purpose Vehicle (SPV) to hold selected assets and liabilities that will not form part of the privatisation transactions. The arrangement is intended to create a cleaner, more commercially viable transaction structure.

The board was informed that both domestic and foreign investors have shown strong interest in acquiring stakes in the first batch of DISCOs. Deadlines for submission of expressions of interest (EOIs) are Aug. 7 for FESCO, Aug. 21 for GEPCO and Sept. 7 for IESCO.

What other privatization moves did the board approve?

In a separate decision, the board constituted two transaction committees to oversee the outsourcing of Islamabad, Lahore and Karachi airports. The Asian Development Bank has already been appointed as financial adviser for the Islamabad International Airport outsourcing. The process of appointing financial advisers for the Lahore and Karachi airports is underway.

The board also approved the appointment of RSM Avais Hyder Liaquat Nauman, Chartered Accountants, to audit privatization transactions completed during fiscal years 2024-25 through 2026-27. The firm will conduct separate audits for each completed transaction. The annual financial audit of the Privatization Commission for fiscal years 2025-26 through 2027-28 will continue to be conducted by BDO Ebrahim & Co., appointed earlier through a competitive bidding process.

What is the government's broader goal with privatisation?

The board reaffirmed the government's commitment to implementing its privatization program through a transparent, competitive and professionally managed process. Officials said the goal is to improve efficiency, attract private investment and maximize value for the state and the people of Pakistan.