The government has approached the World Bank (WB) for Non-Lending Technical Assistance (NLTA) to facilitate private sector participation in the privatisation of power Distribution Companies (Discos).
According to a news report, in a letter to the World Bank’s Country Director, the Economic Affairs Division (EAD) stated that the Ministry of Energy (Power Division) seeks WB’s support under NLTA to carry out several activities aimed at facilitating private sector participation in Discos.
These activities includes drafting guidelines for private sector participation and the competitive process for inviting private investors/operators, sector financial sustainability and sensitivity analysis, updating licensing eligibility criteria and rules, developing a communication strategy and implementation plan, proposing HR strategy and action plan, and assessing the impact of market evolution on private sector participation in Discos.
The EAD has requested the World Bank to consider the Ministry of Energy’s proposal and indicate its commitment to support the initiative under NLTA.
In a recent high-level meeting chaired by Prime Minister Shehbaz Sharif, a decision was made to privatise certain power distribution companies.
In Phase-I, IESCO, Gepco, and FESCO will be fully privatised, followed by LESCO, MEPCO, and HAZECO in Phase-II.
SEPCO, HESCO, and PESCO will be offered long-term concession agreements to the private sector, while TESCO and QESCO will remain under government control due to their unique conditions.
The Privatisation Commission has been directed to hire a transaction advisor and complete the necessary formalities to finalise Phase-I transactions by January 2026.
The Power Division will engage a technical advisor to review the regulatory and policy framework for the privatisation and outsourcing of Discos.
Recently, the government obtained approval for a new Board of Directors for Discos from the Cabinet Committee on State Owned Enterprises (CCoSOEs), following the issuance of an Ordinance to remove existing Boards. This was necessary as the proposal from the Power Division to sack the Boards of Discos was not in line with the SOE law.
There are suspicions that some of the new Board Members have connections with potential investors interested in buying stakes in Discos. However, official circles deny these speculations.
The new Boards are expected to help expedite the privatisation process of Discos in accordance with the government’s approved plan, the sources added.
