Pakistan plans to privatise three DISCOs in first quarter of 2027
Pakistan plans to privatise three power distribution companies in the first quarter of 2027, Prime Minister's Adviser on Privatisation and Chairman of the Privatisation Commission Muhammad Ali said, pushing back a December bidding date after potential investors asked for more time to study the complex transactions.
Faisalabad Electric Supply Company, Gujranwala Electric Power Company and Islamabad Electric Supply Company are first in line, with due diligence already under way, Ali said in an interview released by the Privatisation Commission. Hyderabad and Sukkur are targeted for the second quarter of 2027, and Lahore, Multan, Peshawar and Hazara for the second half of the year.
Ali framed the sell-off as a national security matter, saying high energy costs are eroding industrial competitiveness, exports and growth, and that Pakistan must cut tariffs and open the supply market to stop consumers and factories leaving the national grid. He acknowledged that investors have raised concerns about regulatory uncertainty, tariff revisions and protection of long-term investment, citing the experience of K-Electric, and said the government is drafting safeguards, including finalising investment plans and multi-year tariffs before bidding.
Returns would be paid in rupees rather than dollars, linked to inflation and calculated under the capital asset pricing model, Ali said. Buyers would be held to performance benchmarks on smart metering, loss reduction, recovery and load management, with penalties for misses and rewards for efficiency gains shared with consumers. Workers would be protected for a set period during which investors could not change employment terms, he added.
The commission has prepared a reform paper on tariffs, investment plans and a competitive electricity market, which Ali said the government intends to publish by mid-November after consultations with institutions, the prime minister and the steering committee. The plan would gradually move away from the uniform tariff towards competing suppliers, keeping a supplier of last resort. Ali said the government is also examining the privatisation of Pakistan State Oil, Sui Southern Gas Company and Sui Northern Gas Pipelines Limited, with PSO's strategic activities possibly staying under state control.
