Pakistan to Privatize Three Major DISCOs to Unlock Next IMF Loan Tranche

To make this possible, sources said the federal government aims to privatize three major electricity distribution companies (DISCOs) within the current year.

The first phase will include Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), and Islamabad Electric Supply Company (IESCO).

Sources indicated that the government plans to invite bids for these three DISCOs by mid-April. Financial advisers are working urgently to finalize transaction structures and prepare the bidding framework.

Transaction plans for all three companies are expected to be completed by the first week of April and will then be submitted for approval to the Privatization Board and the Cabinet Committee on Privatization later in the month.

Alvarez & Marsal Middle East was appointed as the Financial Adviser (FA) for private sector participation in Batch-I DISCOs on February 11, 2025. As part of its mandate, the FA has submitted sector-level and enterprise due diligence reports. A working group, including representatives from NEPRA, CPPA-G, ISMO, the Power Division, and the Task Force on Power Sector Reforms, has been tasked with addressing key issues identified in the due diligence.

Investor engagement was carried out in the last week of January 2026 to assess market interest in the proposed transaction structures. Based on market feedback, certain reforms are being developed to make the transactions more marketable. The Privatization Commission (PC) team, in coordination with the FA, is finalizing these reforms, which will be presented to stakeholders, the PC Board, and the CCoP for approval.

The transaction structure and restructuring plan are expected to receive CCoP approval by the first week of April 2026. Following approval, the Expression of Interest (EOI) for the three DISCOs will be published by mid-April 2026.

The bidding deadlines are set in line with the phased privatization schedule: FESCO by October 2026, GEPCO by November 2026, and IESCO by December 2026.

Sources added that the privatization of these DISCOs is a critical step in the government’s commitment to electricity sector reforms, improving operational efficiency, and fulfilling international commitments tied to the IMF loan program.