Islamabad 23 July : The privatization of Pakistan’s state-run power distribution companies (DISCOs) is speeding up as 9 to 10 Independent Power Producers (IPPs) have shown interest in acquiring these assets, according to a news report.
The government plans to privatize 51% to 100% of assets in Iesco, Gepco, and Fesco between January and June of FY26.
Privatizing DISCOs can help Pakistan address key challenges: reducing losses, curbing circular debt, and modernizing grid infrastructure.
Success of privatisation DISCOs is said to depends on a strong regulatory system, pragmatic tariff setting, phased implementation, and careful allocation of performance based contracts.
Pakistan’s is expected to follow a Turkish style long term concession model and to engage performance based frameworks depicting an emerging consensus on how to balance investor incentives with public interest
During a meeting of the Senate Standing Committee on Privatization, Secretary of the Privatization Commission Usman Akhtar Bajwa confirmed that the government plans to sell between 51% and 100% of DISCO assets, with three companies—Islamabad Electric Supply Company (Iesco), Gujranwala Electric Power Company (Gepco), and Faisalabad Electric Supply Company (Fesco)—set to be privatized between January and June of the current fiscal year.
Bajwa highlighted challenges faced by DISCOs, including difficulties in asset transfers, ownership of grid stations, and recovery of dues from government departments. Other concerns include issues with regulatory frameworks, payments to government entities, and pension liabilities.
Currently, 24 state-owned enterprises, including 11 loss-making DISCOs, are on the active privatisation list. These DISCOs own 1,416 properties nationwide.
A senior joint secretary from the Power Division told the committee that 162 of the 450 properties belonging to Iesco, Gepco, and Fesco are in the process of being transferred to their names to facilitate the sale. These properties were previously under the names of provincial governments, Wapda, or cantonment boards.
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The committee was told that efforts were underway to resolve legal issues related to the privatisation, with discussions focusing on the liberalization of the electricity market. The government aims to gradually transition from a centralized model to one with multiple buyers and sellers over the next four to five years.
Summary Table
| Benefit Area | Expected Impact |
|---|---|
| Technical & Commercial Losses | Reduced line losses through infrastructure upgrades, smart metering, theft control |
| Financial Health | Improved bill recovery and profitability; lower circular debt pressures |
| Investment & Expansion | Capital infusion for grid upgrades and operations |
| Accountability & Governance | More transparent, performance-driven management systems |
| Competition & Service Quality | Localized units enable healthier competition and improved customer service |
