PMO directs Power Division to expedite DISCOs privatisation and provincialisation process

The Prime Minister’s Office (PMO) has instructed the Power Division to accelerate the consultative process regarding the privatisation and provincialisation of Distribution Companies (DISCOs) and to develop concrete proposals through the Task Force on Power Sector Reforms. The finalised proposals will be submitted to the Steering Committee on Privatisation of DISCOs for further deliberation, according to a news report. 

The privatisation process is structured into four phases: the first phase, which involved sector-level due diligence and market sounding, was completed by March 18, 2025; the second phase, including company-level due diligence, is currently under review after reports were submitted on May 8, 2025; phase three, focusing on transaction preparation, is set to be completed by June 20, 2025; and phase four, involving transaction implementation, including investor roadshows and contract awards, is expected to conclude by January 15, 2026.

The government has already approved the privatisation of three major DISCOs—Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO), and Gujranwala Electric Power Company (GEPCO)—in a cabinet meeting held on August 13, 2024. This decision marked the first phase of the privatisation initiative. 

The second phase will include Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Hazara Electric Supply Company (HAZECO), while 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. 

Meanwhile, Tribal Electric Supply Company (TESCO) and Quetta Electric Supply Company (QESCO) will remain under government control.

In a bid to support the privatisation efforts, the Power Division, with assistance from the World Bank under Non-Lending Technical Assistance (NLTA), has submitted a comprehensive report to the Privatisation Commission detailing the key deliverables. 

The Power Division has met the conditions set by the Cabinet Committee on Privatisation (CCoP) and the Government of Pakistan, along with additional requirements identified by the World Bank.

On January 1, 2025, the Prime Minister directed the Power Division to assess the potential for provincialisation of DISCOs, transferring ownership and control from the federal government to provincial governments. 

This review is to be conducted in consultation with the provinces, and the Power Division has been tasked with preparing a roadmap, to be reviewed and approved by the Prime Minister.

In parallel, the Committee on Tariff Reduction, chaired by Deputy Prime Minister Senator Ishaq Dar, has been tasked with reviewing the Power Division’s proposals, ensuring that provincial governments are fully consulted before the firm proposals are presented to the Prime Minister for approval.