Pakistan advances DISCO privatisation plan as investors show interest

Pakistan takes next step on DISCO privatisation

Pakistan has moved another step forward with its plan to privatise three major electricity distribution companies, as officials work to prepare the firms for private investment.

The Privatisation Commission Board has approved key recommendations for the first batch of DISCOs. The recommendations will now go to the Cabinet Committee on Privatisation for consideration and approval.

The three companies included in the first phase are Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO).

These companies are important parts of Pakistan’s electricity distribution network. They serve consumers across major areas of Punjab and the Islamabad region.

The government says the restructuring is designed to improve the commercial value of the companies before private-sector participation.

The plans were prepared using audited financial statements for the period ending March 31, 2026. A Special Purpose Vehicle will also be created to separate selected assets and liabilities from the three companies.

This structure is intended to make the transactions easier to manage and more attractive to potential investors.

Why FESCO, GEPCO and IESCO matter

The three DISCOs have been placed in the first phase of the government’s wider privatisation programme. The official privatisation programme lists IESCO, FESCO and GEPCO under Phase I of the power sector plan.

The government believes private-sector involvement can help improve efficiency, reduce operational problems and strengthen service delivery.

The move is also part of broader efforts to attract investment into Pakistan’s energy sector. Officials say the objective is to make the transactions commercially workable while protecting the government’s financial interests.

The Privatisation Commission has previously said the three companies are being prepared for private-sector participation through financial advice, due diligence, investor outreach and transaction planning.

The government has also invited interest from domestic and international investors. The official process provides separate qualification requirements for each DISCO.

According to the latest official information, the government is offering investors the opportunity to acquire between 51% and 100% shareholding with management control in each company.

Investor interest and wider reform plan

Strong interest from potential investors has added importance to the current stage of the process.

For Pakistan, the DISCO privatisation plan is not only about selling state-owned companies. It is also linked to a wider effort to improve the performance of the electricity distribution system.

The country has long faced challenges involving electricity losses, weak recovery, inefficient operations and pressure on public finances. Improving distribution companies is therefore considered an important part of broader power-sector reforms.

The government says the process will be handled through competition and transparency. The Privatisation Commission has also stressed that the programme aims to attract private investment and increase value for the state and the public.

Also Read: State Bank of Pakistan keeps interest rate at 11.5% amid economic uncertainty

However, the process still has several stages to complete. Cabinet-level approval, investor qualification, due diligence and further transaction steps will be required before any final transfer of ownership or management can take place.

The Privatisation Commission’s current programme places several other power companies in later phases, meaning the first batch could provide an important test for the government’s broader strategy.

Airport outsourcing also moves forward

The Privatisation Commission Board also approved measures linked to outsourcing operations at Islamabad, Lahore and Karachi airports.

The Asian Development Bank has been appointed as financial adviser for Islamabad International Airport. Advisers for Lahore and Karachi airports are still being selected.

The board also approved audit arrangements for completed privatisation transactions. Separate audits will be conducted for individual transactions, while the commission’s annual financial statements will continue to be audited under the approved arrangements.

These steps show that the government is pursuing several privatisation and private-sector participation projects at the same time.