ISLAMABAD: Financial Advisors (FAs) have briefed the Power Division and Privatization Commission on private sector participation in three power Distribution Companies (Discos), highlighting necessary regulatory and financial reforms, sources told Business Recorder.
The government aims to privatize Islamabad Electric Supply Company (IESCO), Gujranwala Electric Power Company (GEPCO), and Faisalabad Electric Supply Company (FESCO). The discussions focused on regulatory changes, balance sheet restructuring, and preparatory steps required before privatization.
A consortium led by Alvarez & Marsal Middle East Limited is working on cleaning up Discos’ balance sheets, which currently reflect over Rs 700 billion in liabilities tied to Power Holding Limited (PHL).
FAs presented key findings from global case studies, sector due diligence, and market analysis, outlining several Condition Precedents (CPs) for privatization. These include:
- Notifying eligibility criteria and regulatory frameworks for new licenses.
- Establishing separate performance standards for distribution and supply.
- Revising tariff structures and subsidy mechanisms.
- Institutionalizing anti-theft measures with law enforcement support.
- Addressing off-balance-sheet liabilities as per corporate reporting requirements.
- Implementing the Competitive Trading Bilateral Contract Market (CTBCM) framework to reshape Discos’ service models.
The advisors emphasized the need for a confirmed timeline for CTBCM implementation, which will impact Discos’ exclusivity in their service areas. The government remains committed to ensuring a smooth transition, balancing investor confidence with consumer protection.
Story by Mushtaq Ghumman
