KARACHI: Pakistan’s government plans to issue Expressions if Interest (EoIs) for the privatization of state-owned power distribution companies (DISCOs) in January next year, Privatization Adviser Muhammad Ali said on Thursday, as officials expect investors from Türkiye to show interest.
Pakistan has attempted to privatize its loss-making state-owned enterprises to raise funds and reform them as envisaged under a $7 billion International Monetary Fund (IMF) program secured last year. DISCOs, which handle billing, recoveries and grid maintenance, have long suffered from corruption and political interference.
Pakistan has turned to private entities to manage these companies, with Finance Minister Muhammad Aurangzeb saying nearly 90 percent of DISCO boards are now chaired by private-sector professionals to ensure better governance and gradually improve recoveries. Prime Minister Shehbaz Sharif’s government plans to privatize three DISCOs, the Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO) and Gujranwala Electric Power Company (GEPCO).
“We are publishing the EoIs (Expressions of Interest) for investors in January,” Ali, who also chairs Pakistan’s Privatization Commission, told Arab News. “Right now, we are finalizing their restructuring plan and transaction structure.”
In the second phase of the privatization of DISCOs, the government will divest its shareholding from Hyderabad Electric Supply Company (HESCO) and Sukkur Electric Power Company (SEPCO) firms.
Pakistan’s Privatization Commission appointed Raiffeisen Investment as its financial adviser for the privatization of HESCO and SEPCO last month. Raiffeisen Investment is a leading advisory firm in Central and Eastern Europe.
The Pakistani government, which owns or controls much of the power infrastructure, is grappling with ballooning “circular debt,” or unpaid bills and subsidies, that has choked the power sector and weighed on the economy.
The liquidity crunch has disrupted supply, discouraged investment and added to fiscal pressure, making it a key focus under Pakistan’s IMF program.
‘TURKISH COMPANIES TO SHOW INTEREST’
Local media recently reported that Pakistan has sought experienced international private investors, particularly from Türkiye, to take part in the upcoming privatization of its DISCOs.
Officials with knowledge of the privatization process told Arab News that the government expected Turkish companies to “show interest.”
“Türkiye is a model of successful private sector participation in power distribution companies,” an official told Arab News on condition of anonymity, as he was not authorized to speak publicly on the matter.
“It is expected that Turkish companies would show interest.”
Raiffeisen Investment is a Türkiye-based company, another official pointed out. He added the Financial Advisory Services Agreement (FASA) with Raiffeisen Investment Finansal Danismanlik Hizmetleri Limited Sirketi was signed on Nov. 27.
The officials said members of the Turkish delegation recently met Pakistani officials recently at the Power Division.
“As far as DISCOS are concerned, the work on them will start in the first quarter of next year,” the officials said.
