ISLAMABAD: The government has approached the World Bank for Non-Lending Technical Assistance (NLTA) to facilitate private sector involvement in the privatization of power Distribution Companies (DISCOs), sources informed Business Recorder.
In a letter to the World Bank’s Country Director, the Economic Affairs Division (EAD) stated that the Ministry of Energy (Power Division) seeks the World Bank’s support under NLTA for the following activities to promote private sector participation in DISCOs:
Drafting guidelines for private sector involvement and competitive processes for inviting investors/operators.
Conducting sector financial sustainability and sensitivity analyses, including developing a financial model, a framework for uniform tariffs, and procedures for managing DISCOs’ liabilities and subsidies.
Updating licensing criteria and rules for distribution and suppliers of last resort.
Developing a communication strategy and implementation action plan.
Proposing an HR strategy and action plan for implementation.
Assessing the impact of market evolution on private sector participation in DISCOs.
The EAD has requested the World Bank to consider this proposal and indicate its commitment to support it under NLTA.
A high-level meeting, presided over by Prime Minister Shehbaz Sharif, recently decided to privatize certain power distribution companies. In Phase I, IESCO, GEPCO, and FESCO will be fully privatized, 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 finalize Phase I transactions by January 2026. The Power Division will engage a technical advisor to review the regulatory and policy framework for the privatization 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) after issuing an ordinance to remove the existing boards. This move aligns with the government’s plan to expedite the privatization process of DISCOs.
Despite speculations that some new board members have ties to potential investors, official circles have denied such claims, affirming the new boards will facilitate the government’s approved privatization plan.
Story by Mushtaq Ghumman
