ISLAMABAD: In a major policy shift regarding the privatisation of power distribution companies (DISCOs), the government is now likely to offer only one DISCO — Gujranwala Electric Power Company (GEPCO) — for outright privatisation, while Islamabad Electric Supply Company (IESCO) and Faisalabad Electric Supply Company (FESCO) will be offered under long-term concession agreements, well-informed sources told Business Recorder . The Privatisation Commission (PC), which has been moving slowly on the matter, is finalising the much-discussed transaction model for DISCOs. Letters of Intent (LoIs) are expected to be issued during the first month of January 2026. Previously, the government had decided to privatise three DISCOs— GEPCO, IESCO and FESCO—in the first phase, while Sindh-based companies, Hyderabad Electric Supply Company (HESCO) and Sukkur Electric Power Company (SEPCO), were to be offered to the private sector under a long-term concession model. Iesco, Fesco and Gepco set for sell-off by Dec-end On December 15, 2025, Prime Minister Shehbaz Sharif presided over a meeting on power sector issues, including the privatisation of DISCOs. During the meeting, the Ministry of Privatisation highlighted reasons for delays in advancing the privatisation process. According to sources, the Ministry informed the Prime Minister that DISCOs were not fully cooperating with the Privatisation Commission in fulfilling Conditions Precedent (CPs), particularly regarding the transfer of properties. The Prime Minister subsequently directed the Privatisation Commission, Defence Division, Chief Secretary Punjab, and the Ministry of Interior/CDA to extend full cooperation in the transfer of DISCOs’ properties. In this regard, Minister for Power Sardar Awais Ahmad Khan Leghari has been directed to convene a meeting of all stakeholders to resolve property transfer issues of the three DISCOs and fast-track the privatisation process. The Prime Minister also instructed the Privatisation Commission to ensure issuance of Expressions of Interest (EOIs) for the second phase of DISCOs in line with the already committed timeline of December 31, 2025. During a recent visit by Turkiye’s Minister for Energy, Alparslan Bayraktar, Power Minister Sardar Awais Ahmad Khan Leghari emphasised Pakistan’s interest in attracting experienced and reputable international private-sector investors for DISCO privatisation. He termed Turkiye’s involvement particularly significant due to its extensive experience in the power distribution sector. Leghari stated that Pakistan would soon offer its first three DISCOs for privatisation and that the EOI for investors was ready for issuance. Acknowledging the strengths of the Turkish model, he called for closer collaboration between the officials and institutions of the two countries, particularly highlighting Turkiye’s successful implementation of the concession model. Under the government’s plan, transaction advisers will be engaged for long-term concessions, potentially adopting the Turkish model, which has delivered improvements in private-sector participation, service quality and loss reduction. In the second phase, Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO) and Hazara Electric Supply Company (HAZECO) will be offered for privatisation. Meanwhile, HESCO, SEPCO and Peshawar Electric Supply Company (PESCO) will be offered under a concession model, while Tribal Areas Electric Supply Company (TESCO) and Quetta Electric Supply Company (QESCO) will initially be retained for improvement and later offered through management contracts. Sources said the Conditions Precedent include, among others: (i) notification of licence eligibility rules and regulations; (ii) separation of performance standards for distribution and supply; (iii) notification of power procurement regulations; (iv) modification of tariff rules to address uniform tariff issues; (v) clarification and recovery mechanisms for subsidies; (vi) clean-up of DISCOs’ balance sheets; issuance of shares; (vii) development of mechanisms for timely payment of government dues; (viii) revision of DISCO tariff targets under the National Electricity Policy (NEP); (ix) development of strategic roadmaps; (x) institutionalisation of anti-theft and recovery systems; (xi) recognition of off-balance-sheet liabilities; (xii) defining customer eligibility for supplier choice; (xiii) revision of DISCO licence regimes; and (xiv) confirmation of timelines for full implementation of the Competitive Trading Bilateral Contract Market (CTBCM). The Privatisation Commission’s adviser, Alvarez & Marsal Middle East, has submitted its sectoral due diligence report, which flagged several issues. While some have been resolved, others remain outstanding. Copyright Business Recorder, 2025