ISLAMABAD: State Minister for Finance Bilal Azhar Kayani this week said the government’s move to successfully sell its stake in the state-owned Pakistan International Airlines (PIA) will trigger greater investor interest in Islamabad’s privatization program. 

In December, a consortium led by the Arif Habib Group won the bid for a 75 percent controlling stake in Pakistan’s flag carrier by offering Rs 135 billion ($482 million).

Pakistan’s government has undertaken the drive to privatize or restructure its loss-making state-owned enterprises (SOEs) at the International Monetary Fund’s (IMF) insistence.

In an interview with the state-run Pakistan TV on Thursday, Kayani said the government will next focus on privatizing electricity distribution companies (DISCOs) such as the Islamabad Electric Supply Company (IESCO), Gujranwala Electric Supply Company (GESCO) and Faisalabad Electric Supply Company (FESCO).

“The momentum created by the PIA deal will help generate greater investor and advisory interest going forward for the privatization program,” Kayani was quoted as saying by Pakistan TV. 

“The next phase of privatization is focused on electricity distribution companies, including IESCO, GEPCO and FESCO.”

The power sector has drained Pakistan’s public finances due to high losses, inefficiencies and mounting subsidies, making it a central focus of Pakistan’s reform agenda under the IMF program.

Pakistan’s Privatization czar Muhammad Ali last month announced the government plans to issue Expressions of Interest (EoIs) for the privatization of state-owned DISCOs in January. 

Pakistan’s government owns or controls much of the power infrastructure. It is also grappling with ballooning “circular debt,” or unpaid bills and subsidies, that have choked the power sector and weighed on the economy.