Privatization Commission will invite expressions of interest next month for stakes in three electricity distribution companies and one state-owned bank.
The four entities earmarked for privatisation are Islamabad Electric Supply Company, Gujranwala Electric Power Company, Faisalabad Electric Supply Company, and Zarai Taraqiati Bank Limited.
First Phase of Sales
This first phase of divestment covers IESCO, GEPCO, and FESCO alongside Zarai Taraqiati Bank Limited, as part of Pakistan’s broader IMF-linked economic reform program.
A second phase will later include Hyderabad Electric Supply Company and Sukkur Electric Power Company among additional power distributors targeted for private-sector transfer.
The Privatization Commission is specifically targeting foreign investors, particularly from the Middle East and Turkey, to participate in the upcoming bidding process.
Financial Pressure Behind the Move
The power sector in Pakistan cost the government over 1.2 trillion rupees in annual subsidies during fiscal year 2025, placing severe strain on public finances.
Transmission and distribution losses combined with electricity theft have kept overall losses at approximately 20 percent, eroding the financial viability of distribution companies.
The government views privatisation as a direct means of transferring operational risk to private investors while reducing the state’s growing subsidy burden.
Pre-Sale Reforms Underway
As part of pre-privatisation reforms, authorities have restructured governance across the three distribution companies ahead of formally launching the public sale process.
Around ninety percent of board positions at the targeted distribution companies have been filled with professionals recruited from Pakistan’s private sector.
The government says these governance changes are designed to improve transparency and operational efficiency before the formal privatisation transactions are completed.
Obstacles Remain
Despite the government’s momentum, some political parties and employee unions have expressed resistance to the privatisation program, according to analysts familiar with the process.
Privatisation efforts in Pakistan have historically faced legal challenges, opposition from labour groups, and significant delays in obtaining the necessary regulatory approvals.
Sustaining investor confidence will depend on how quickly the government resolves these structural and political obstacles alongside running the formal bidding process.
