The Cabinet Committee on Privatisation (CCoP) has approved the restructuring plan for three major electricity distribution companies as the government moves forward with broader power sector reforms and plans for their potential sale.
The first batch includes Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO).
The restructuring is aimed at making the distribution companies financially sustainable, professionally managed and digitally enabled while improving electricity services for residential, commercial and industrial consumers.
Under the approved plan, selected assets of the three DISCOs, including all land parcels, will be transferred to a government-owned special purpose vehicle (SPV).
Selected liabilities will also be shifted to the SPV. These will include post-retirement benefits of employees who have already retired, along with a material amount of funds.
However, retirement benefits for current employees will remain with their respective DISCOs.
Intergovernmental receivables and payables will also be netted off as part of the restructuring process to settle outstanding government receivables.
According to the Privatisation Commission, the restructuring plan has been designed to remain fiscally neutral while improving the value of the companies for the government and ensuring that the planned transaction remains viable.
The government said continuity of electricity services would remain a priority throughout the restructuring and transaction process.
It also stated that employee interests would be protected in accordance with applicable laws and the arrangements finalized for the transaction.
Advisor to the Prime Minister on Privatisation Muhammad Ali said consumers would continue to be protected under Pakistan’s existing regulatory framework.
He explained that electricity tariffs would continue to be determined through the applicable National Electric Power Regulatory Authority (NEPRA) process and subsequently notified by the government.
According to the government, the restructuring will instead focus on improving reliability, operational efficiency and customer service.
FESCO, GEPCO and IESCO collectively provide electricity services to more than 14 million consumers across major industrial, commercial and urban areas.
The government believes improving the performance of these companies will be important for reducing electricity tariffs and providing more competitive power services to Pakistan’s economy.
The approval represents another step in the government’s efforts to address longstanding issues in the power distribution sector and establish modern, accountable and consumer-focused DISCOs.
The restructuring is part of the broader privatization and power sector reform agenda, with the government seeking to improve the financial sustainability and efficiency of electricity distribution companies before their potential sale.
