Prime Minister Shehbaz Sharif has instructed the Power Division to simultaneously pursue the privatization and provincialization of Power Distribution Companies (Discos) to meet commitments made to development partners.
According to a news report, in a recent meeting on power tariff reduction and the provincialisation of Discos, the Prime Minister directed the Power Division to prepare a comprehensive roadmap and timeline for transferring Discos’ ownership and control to provincial governments. Simultaneously, the privatisation process for IESCO, FESCO, and GEPCO under the first phase will proceed as planned.
The Power Division has been tasked with completing all prior actions and conditions precedent (CPs) before January 31, 2025. This timeline aligns with a decision made by the Cabinet Committee on Privatisation (CCoP) in August 2024, later ratified by the federal cabinet.
The Privatisation Commission is actively coordinating with the Power Division to finalise these preparatory measures. Among the key CPs, the Power Division is expected to notify regulations for licence eligibility, separate performance standards, and tariff structures.
Additionally, it must clarify subsidy mechanisms, clean up Discos’ balance sheets, and develop strategic roadmaps for improved commercial performance and anti-theft initiatives.
The Commission is also finalising the selection of a financial advisor for the first phase of privatisation. Once selected, the advisor will assist in implementing equity sales or concession contracts for targeted Discos.
As part of broader reforms, the National Electricity Policy (NEP) requires the Power Division to ensure timely payment mechanisms, institutionalise anti-theft measures, and revise tariff guidelines for efficiency. The Competitive Trading Bilateral Contract Market (CTBCM) framework, set to impact Discos’ exclusivity in their service jurisdictions, must also be fully implemented within the outlined timeline.
