IMF tells Pakistan to privatise loss-making DISCOs on time

The International Monetary Fund has told the government to complete the privatisation of Pakistan's power distribution companies on schedule, warning that delay would deepen the losses carried by the state. The lender's message, relayed by officials, is blunt: the budget deficit will stay out of control until the DISCOs are sold.

The IMF described the distributors' losses as a major cause of the deficit and a major part of the losses at state-owned corporations. "It will be unwise to extend running the public funded power distribution companies," the lender told government authorities, adding that privatisation is necessary to remove those losses from the public sector budget.

The government is already moving on a broader overhaul of electricity distribution. It is targeting the sale of three companies in the first quarter of 2027: Faisalabad Electric Supply Company, Gujranwala Electric Power Company and Islamabad Electric Supply Company. Further DISCO transactions are scheduled later in 2027.

The IMF's push puts the timetable under scrutiny. Its warning is that every delay adds to the economy's losses, tying the pace of the sell-off directly to the country's fiscal position.