Discos’ sell-off/provincialisation: PMO directs Power Div. to expedite consultations

ISLAMABAD: The Prime Minister Office (PMO) has directed the Power Division to expedite the consultative process on Discos privatisation/ provincialisation and develop proposals through Task Force on Power Sector Reforms, well informed sources told Business Recorder.

The finalized proposals shall be submitted to the Steering Committee on Privatisation of Discos.

The Cabinet approved the outright privatisation of three DISCOs—Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO), and Gujranwala Electric Power Company (GEPCO)—in its meeting held on August 13, 2024, marking the first phase of the privatisation initiative.

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The second phase will include Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Hazara Electric Supply Company (HAZECO). Meanwhile, Hyderabad Electric Supply Company (HESCO), Sukkur Electric Power Company (SEPCO), and Peshawar Electric Supply Company (PESCO) will be offered under a Concession Model through long-term agreements. Tribal Electric Supply Company (TESCO) and Quetta Electric Supply Company (QESCO) will be retained by the government.

The Power Division, with support from the World Bank under Non-Lending Technical Assistance (NLTA), has completed a consolidated report detailing key deliverables, which has been submitted to the Privatisation Commission. The Power Division has met the Conditions Precedent (CPs) set by the Cabinet Committee on Privatisation (CCoP) and the Government of Pakistan, along with additional requirements identified by the World Bank as of January 31, 2025.

The Financial Advisor for Phase-I DISCOs was appointed by the Privatisation Commission, with the Financial Advisory Services Agreement signed on February 11, 2025. The process is structured into four phases: (i) phase I: Sector-level due diligence, inception report, market sounding, and global experience review – completed by March 18, 2025; Phase II: Company-level due diligence (legal, technical, financial, environmental, and HR) – reports submitted May 8, 2025, currently under review; Phase III: Transaction preparation, including restructuring plans and preliminary financial modeling – due June 20, 2025; and Phase IV: Transaction implementation, including investor roadshows, information memoranda, bidder pre-qualification, bidding documents, contract awards, and financial closure – targeted for completion by January 15, 2026.

On January 1, 2025, Prime Minister had directed Power Division to thoroughly examine the Provincialisation of DISCOs (ie transferring the ownership and control of Discos from the federal government to the provincial governments) in consultation with provinces and prepare a roadmap with the timelines for the review/approval of the Prime Minister. The Prime Minister Office had further directed that Power Division work simultaneously on the privatisation of Discos identified for privatisation in the first phase i.e. IESCO, FESCO and GEPCO. Power Division shall follow the agreed schedule and complete all the prior actions (conditions precedents) before January 31, 2205.

The Committee! constituted by the Prime Minister on Tariff Reduction chaired by the Deputy Prime Minister/Foreign Minister Senator Ishaq Dar has been tasked to thoroughly review the proposal prepared by the Power Division while taking Provincial Governments on board. The firm up proposal shall be submitted for approval of the Prime Minister.

Copyright Business Recorder, 2025